Bybit Review – How Does This Cryptocurrency Exchange Measure Up?

About Bybit

With the massive growth of cryptocurrency traders and crypto assets in 2017, an opportunity opened in the industry for new cryptocurrency exchanges. Since that time, the services offered by many trading platforms have undergone massive change due to technological advances allowing for newer services (such as staking), public demand, growing trading volumes, and/or jurisdictional law. Competition in the industry has also pushed exchanges to maintain relevance in the market by increased service offerings, which is particularly so with this KYC-free crypto exchange.

Overall, the Bybit exchange is a robust cryptocurrency exchange, offering a wide range of services including leveraged trading and crypto derivatives trading to eligible clients within accepted regional territories. Bybit market data has shown growth in high-volume trading in recent years with over 2 million registered users on the trading platform, although this may be aided heavily by the incentivized referral program offered on the exchange. 

Within the derivatives markets on the Bybit exchange are a number of different contracts including USDT perpetual contracts and inverse perpetual contracts. Traditional trading on the spot market is also available for those that are not interested in leverage trading. The cryptocurrency exchange also offers passive income services available to clients to earn interest on their holdings. 

This Bybit review will cover the various aspects of this crypto exchange and highlight some of the offerings that set it apart from other exchanges.  While it is vital to learn the background and offerings of cryptocurrency exchanges before investing real funds and crypto assets,  in no way, shape or form will this Bybit review constitute investment advice. Rather, some of the topics covered in this Bybit review will include:

• A history of the exchange
• An overview of the services and trading pairs offered
• Bybit fees
• The withdrawal and deposit methods Bybit offers
• Security and Customer Support
• Ranking of the various services of Bybit vs other exchanges

Bybit History and Background

The Bybit crypto derivatives exchange, owned and operated by Bybit Fintech Limited, was founded in March of 2018 after the large growth the industry saw in the years previous. Since its inception, the cryptocurrency exchange market data has seen a large growth in popularity, growing to more than 2 million registered users with an active trading account. The company holds a headquarters in Singapore, while Bybit Fintech Limited is located and holds an operating license in the British Virgin Islands. 

The crypto exchange has become a very visible contender in the market, not only offering derivatives trading, but also an attractive referral program benefitting customers that sign up using a referral program link. The crypto exchange is also present on a large number of different social media channels including Facebook, Reddit, Instagram, Telegram, and more.

Restricted Countries

Due to jurisdictional law, Bybit is not offered to residents of the following countries and regions:

• The United States of America
• Singapore
• North Korea
• Mainland China
• Quebec (Canada)
• Iran
• Cuba
• Sudan
• Sevastopol 
• Crimea

If accounts are found using the exchange’s services in any restricted region, Bybit may take any number of disciplinary actions against the user’s account, including account termination and the closing of any held open-position trades. Due to this reason, restricted-territory residents should seriously reconsider any independent financial advice that may suggest using VPN services to bypass the regional geo-blocking restrictions.

Overview of Services Offered on the Bybit Exchange

Bybit has a large number of services available for clients using their exchange. Whether using the Bybit mobile app, trading on the spot market, or leverage trading with contracts, both beginners and experienced traders will likely be satisfied by the offerings. Passive income opportunities and incentivized programs such as a referral program that rewards users for new accounts created via a referral program link. To top it off, a mutual insurance fund exists to help safeguard against losses in the contracts market.

Before investing with real funds, customers can get a feel for the various Bybit trading platforms by using TestNets. It may also be beneficial to learn about the various order types and other services that Bybit offers before attempting to start trading on their platform. 

As far as Bybit trading goes, the Bybit trading interface is congruent across all markets. This helps to ensure that no matter what market a trader may trade, there will be no surprises. The interface also has a familiar look and feel to it, as any Binance user would likely feel at home with the design. A massive plus to the Bybit trading interface is integration with TradingView charts for advanced charting tools. 

Leveraged Trading/Futures Contracts

One of the most attractive services offered by the Bybit exchange are the many different derivatives trading platforms available for users. While these margin trading/leverage trading services are best left for experienced traders, traders can receive up to 100x leverage based upon their initial margin of deposited crypto assets. Traders also have the option for cross-margin or isolated-margin positions for margin trading.

Margin trading/leveraged trading can be a very useful part of the trading strategies of experienced traders, as it allows for positions to be opened for a fraction of what the position would cost at a 1:1 ratio. To give a hypothetical and easy-to-understand example of this:

•  A position with an initial margin of $1 at 25x leverage will have a position size of $25
• Whereas, with 100x leverage, the same $1 initial margin at 100x leverage will have a position size of $100 

However, due to the inherent risk of liquidation for most traders, 100x leverage is best left for institutional traders. 

Rather than trading actual crypto assets such as seen in spot trading markets, futures trading allows traders to make trades based on the price of the underlying asset. Because contracts are traded based upon the underlying asset value, the user will not be able to withdraw any of the digital currencies traded in this market. Users looking to retain actual ownership of digital currencies should instead use the spot trading market. 

Furthermore, there are a few different types of contracts available on Bybit, including standard futures contracts, inverse contracts, and perpetual contracts. Regular futures contracts have an expiration date tied to the contract itself, while perpetual contracts can remain open as long as the customer wishes (granted that the price doesn’t reach margin-call levels due to set liquidation based upon margin used for the position). While these previously aforementioned contracts tend to pay out profits in USD/USDT, inverse futures contracts allow customers to receive profits in cryptocurrency. Perpetual trading can be a great strategy for day traders.

USDT Perpetual Contracts

Perpetual trading is a very popular service that allows traders to trade with never-expiring contracts with up to 100x leverage on some pairs. Bybit offers derivatives trading of crypto in USDT perpetual contracts, allowing traders to maintain an open position for any length of time (depending on the margin requirements of the position) and grow their funds in USDT. Because USDT is the base currency, the collateral provided for the initial margin will also need to be USDT.

There are a decent number of trading pairs in the USDT perpetual contracts section of the Bybit trading platform. The exchange has continually added pairs to the service’s offerings, an incentive most traders will find to continue using this platform. The digital currencies currently offered include:

• BTC/USDT
• ETH/USDT
• BNB/USDT
• ADA/USDT
• DOGE/USDT
• XRP/USDT
• DOT/USDT
• UNI/USDT
• BCH/USDT
• LTC/USDT
• SOL/USDT
• LINK/USDT
• MATIC/USDT
• ETC/USDT
• EOS/USDT
• SUSHI/USDT
• XEM/USDT
• AAVE/USDT
• FIL/USDT
• XTZ/USDT

Inverse Perpetual Contracts

Bybit also offers inverse perpetual contracts on their crypto exchange, allowing traders to open non-expiring margin trading contracts (margin/liquidation dependent) using crypto assets as collateral for intial margin. An inverse perpetual contract is an effective way for traders to boost their crypto portfolio, as any profits are paid out in crypto as opposed to USDT. 

Compared to the USDT perpetual contracts market, Bybit has significantly less trading pairs available for trading with the inverse perpetual contracts. These pairs include:

• BTC/USD
• ETH/USD
• EOS/USD
• XRP/USD

100x leverage is offered for BTC/USD, while the rest of the pairings have a maximum of 50x leverage.

Inverse Futures Contracts

The Bybit platform also has inverse contracts for futures. These differ from the inverse perpetual contract in that these contracts have a settlement date. Users profit based upon the difference in the price of the underlying asset at opening and settlement dates, however, these positions can be closed prior to the date. Bybit currently only has two pairs available for this market, with options for the time frame of the settlement:

• BTC/USD Quarterly
• BTC/USD End of Year
• ETH/USD Quarterly
• ETH/USD End of Year

Bybit Mutual Insurance Fund

Perhaps one of the most unusual and interesting services offered by the Bybit exchange is the Bybit insurance fund that allows users to safeguard their portfolios from taking losses on derivatives positions. Operating like any other typical mutual insurance fund commonly used for health and accident-related expenses, customers can receive a payout on losses by paying into the Bybit insurance fund.

Mutual insurance is available in durations of 2 hours, 12 hours, and 48 hours, with protections for both long and short positions. Mutual insurance can cover 25%-100% of the open position, with a maximum amount of insurance per order at $200,000. Accounts overall can have a maximum of $1,000,000 coverage. The absolute minimum amount of mutual insurance that can be purchased is $500.

This is similar to the Binance exchange when it was announced that “All your funds are SAFU,” relating to an insurance fund that was created to prevent any customer account fund losses due to a hack. While the mutual insurance fund may not be an economical way to ensure “All your funds are SAFU” against bad trading strategies, it can be a way for larger accounts to minimize their risk and exposure to volatile market conditions. 

Spot Trading Market

While Bybit is primarily known as a crypto derivatives exchange, a spot market is available to cryptocurrency traders that have no interest in leveraged trading with up to 100x leverage (which, to be fair, is not for everyone). However, the one main benefit to spot trading is having actual ownership of the cryptocurrency bought on the market. 

As opposed to leveraged trading, spot trading is done at a 1:1 ratio. Traders can make trades with a base currency of USDT or BTC. Bybit is continually adding to their modestly-sized listing of spot market pairs, with the most recent addition being XRP/BTC (listed August 12, 2021). These pairs include:

• BTC/USDT
• ETH/USDT
• EOS/USDT
• XRP/USDT
• ETH/BTC
• XRP/BTC

Bybit Order Types

Like many other exchanges in the industry, Bybit makes a number of different order types available to help suit the individual needs and trading strategies any trader may have. Though these order types are not unique by any means, well-seasoned traders can find comfort in knowing that there are different types of orders available. Likewise, the type of order used will likely affect the trading fee the trade will incur (more on trading fees and other Bybit fees later). 

The order types that can be found on the Bybit exchange include:

• Market order – used to execute a buy/sell immediately at current market price
• Limit order –  used to execute a buy/sell at a designated trigger price
• Stop-Market order – used to execute a buy/sell at current market price once a trigger price for the order is reached
• Stop-Limit order – uses a target price to initiate a limit order once the stop-price is reached; and generally considered a great risk management tool; the limit order attached to this order type executes like a standard limit order
• Good Til Canceled – an order waiting to be filled remains open until canceled
• Immediate or Cancel – an order designed to immediately cancel any unfilled portion of quantity from the order once the order executes
• Fill or Kill – an order designed to immediately execute and fill the order, or cancel the order if the action is unavailable to fill the entire quantity of order at one time
• Post-Only – an order option available allowing traders to place their order in the order book to help ensure the customer pays market maker fees as opposed to taker fees
• Close on Trigger – an option available to allow traders to ensure an order is executed, automatically closing open positions if there is not enough margin available to fulfill the order; a great risk management tool

Bybit Mobile App

Convenient trading can easily be done with the Bybit app found available for both Apple and Android phones. The Bybit Mobile app features the same sleek design and account management offered on the exchange’s main website. Users can make deposits, withdrawals, and execute trades all from the comfort of a mobile phone via the Bybit app. 

ByFi Center

The ByFi Center is a section of the Bybit exchange dedicated to passive income services. Currently, there are two services offered: DeFi Mining (mining on Curve Finance protocol), and Cloud Mining, with Dual Asset Mining (mining on Uniswap V3) to come in the near future. 

DeFi Mining

One such service is called DeFi Mining, which allows users to stake as little as $100 USDT on the Curve Finance protocol for a set duration of time between 7-21 days. During this time period, customers will receive staking rewards (typically standard around rates of 15-17% APY rate). 

As advised by the Bybit Help and Support section, customers should fully understand and accept the risk that their funds may be subjected to a number of different crises that could arise. These could include operating mechanism errors, security issues related to smart contracts, crises in liquidity volume on the protocol, and unpredictable market conditions.  

Cloud Mining

Another service offered in the ByFi section of Bybit is Cloud Mining. Users can cloud mine the Ethereum blockchain through Bybit’s affiliated mining farms by purchasing 7-days worth of hashing power. Higher hash rates lead to greater rewards, as miners can execute a larger number of hashes each second.

Generally, pricing for hash rate depends greatly on the amount of hash rate being purchased. The lowest amount, 300 MH/s, averages to be about $138, with 2000 MH/s, the highest amount of hash rate offered, averaging around $830. Unfortunately, the service seems to be accessible by invitation only, though Bybit claims that daily invitations are sent to randomized groups of trading account holders. 

Bybit Rewards

Account-holders can also participate in the Bybit Rewards program. By completing the necessary actions, users can be rewarded in a number of different ways. Some of the rewards from the Rewards Hub include coupons that can be used to save on Bybit fees, including eliminating a trading fee for a trade, cutting the cost on a funding fee, and more. 

A Bybit bonus may also be offered to the customer for using the Rewards program. The Bybit bonus differs from the aforementioned coupons in that they can be used for account funding and margin trading.

Bybit Referral Program

The referral program offered on Bybit helps to incentivize users to recruit cryptocurrency traders to the Bybit platform. By successfully generating new recruits (who also fund their accounts) using a registered referral link, users can receive rewards based on their trading volumes during a measured period of time. This can be a useful program if a recruit has high volume trading patterns, as the maximum payout per rewards card can reach as high as $500 USDT.

Bybit Affiliate Program

For social media influencers, content creators, and others that have an audience and wide reach of people, the Bybit Affiliate Program is an excellent service. Like the Referral Program, this program rewards users for new recruits brought to the crypto exchange via a referral link. 

Unlike the Referral Program, which gives rewards based on the volume of trades made by new recruits, the Affiliate Program actually pays out a percentage of Bybit’s profits made from the recruits’ trades. Referred Bybit account holders can earn the user up to 30% of Bybit’s profits, while second-generation recruits (those recruited by the recruits) can earn the user up to 10% of Bybit’s profits.

WSOT

One of the things that help set Bybit apart from other cryptocurrency exchanges in the industry is the WSOT (World Series of Traders) contest they hold on their exchange. WSOT is a massive site-wide competition where traders can compete against each other as a team or as individual traders. 

To win the competition, the team (or individual trader) must simply generate the most profits during the contest window time. The overall prize pool can be as much as 7,500,000 USDT, with a collection of NFT’s also offered as prizes. Spot trading fees are waived for contestants during the event. 

Bybit Fees

In this section of the Bybit review, the various fees associated with using the exchange will be covered. Bybit fees are generally fairly standard in comparison to other exchanges, but because they are primarily a crypto derivatives exchange, there are a number of different fees to be aware of. Many of the trading fees are not only caused by trade executions but for position management as well, especially when keeping perpetual contracts positions open. 

Trading Fees

The trading fees one pays for using the exchange differ greatly depending on the type of orders placed on the market. A user will likely pay Taker fees (which is usually a higher rate) for executing orders types such as the market order, or for not using a Post-Only order. To pay Market Maker fees (generally a lower price), the user will need to have their order in the order book. 

For both standard and perpetual contracts (including Inverse and USDT), taker fees are .075% for all trades, while a market maker will receive a 0.025 rebate on trading fees. However, unlike perpetual contracts, the standard contracts that have a settlement date will also incur a settlement fee of 0.05%.

Spot trading fees are relatively identical to the fees seen with futures.  Taker fees are roughly 0.1%, while maker fees are 0.0%. Taker fees will incur with market orders as well as any other order that fills immediately or is not posted in the order book. Overall, these spot trading fees are relatively comparable to many cryptocurrency exchanges found in the industry.

Funding Fee

While contract trading involves trading of the price of an asset, as opposed to the actual asset, the Bybit exchange has measures in place to make sure that the price of the contracts remains tied to the assets on the spot market. The overarching measure to ensure this is the funding fee, which is exchanged every 8 hours between those that are buying and those that are selling. If the funding fee rate is positive, buyers pay, while a negative rate causes sellers to pay. The fee is rated at 0.01%.

Account Funding and Associated Fees

There are several different deposit methods Bybit offers to clients. The first is funding via cryptocurrency, which is likely the case for most traders. Assets eligible for a Bybit deposit include:

• BTC
• ETH
• EOS
• XRP
• USDT 
• DOGE
• DOT
• XLM

A fiat gateway also exists on the Bybit trading platform, with over 50 fiat currencies accepted through 3rd party payment processing partners. It should be noted that while the Bybit exchange can be a KYC-free exchange, a user must be KYC verified before using the fiat gateway services. 

There are no fees associated with funding an account via a Bybit deposit. However, the various deposit methods Bybit does offer (specifically those handled by 3rd party partners) may incur their own fee relative to the service provider. Regardless, Bybit makes it easy to fund an account and start trading.

Bybit Withdrawals and Withdrawal Fee

Withdrawals have a slightly higher fee rate than those typically found with other cryptocurrency exchanges. The purpose behind the Bybit withdrawal fee being higher is to help transactions occur faster by incentivizing block miners to process the blockchain data associated with the exchange’s data transfers. 

The Bybit withdrawal fee and minimum withdrawal amounts for each cryptocurrency are as follows:

Bybit Security and Customer Support

As far as security goes, Bybit is pretty comparable with other crypto exchanges. Users can add Two-Factor Authentication to their accounts by either SMS messages (sent to a phone) or a 3rd party dedicated Two-Factor Authentication application that can be installed on a mobile device. A dedicated Two-Factor Authentication app will produce a unique code registered with your account every 30 seconds. Account logins and actions can then be verified by providing the Two-Factor Authentication codes when prompted. 

While the information in this Bybit review does not constitute investment advice or any independent financial advice, it is highly advisable that Two-Factor Authentication be used as a bare minimum method of account security. Too many times have accounts been breached that could have been prevented with this simple security measure.

On the customer support side of the Bybit trading platform, Bybit has a very in-depth knowledge center (Bybit Learn) and FAQ section provided to customers, allowing them to start trading confidently with an understanding of the exchange’s workings. Along with social media channels, a blog is also available to keep customers informed of the latest news and events of the exchange.

If a customer has a specific issue that cannot be resolved with the FAQ, the Bybit customer support team can be contacted by clicking a button at the bottom right-hand corner of Bybit’s home page. Overall, Bybit customer support is pretty responsive to their customer’s issues. Should an issue arise, the customer support team will likely respond to the user via email.

Opening a Trading Account

An account can be opened very easily via the web version or by using the Bybit mobile app. To get started, all an individual needs to do is click the “Sign Up” button, provide a valid email address and create a password. 

While Bybit does not require KYC information to start trading, a user may want to verify KYC information for access to the fiat gateway as well as larger withdrawal limits. The current limits are as follows:

Bybit Review Conclusion

Overall, Bybit trading platform is a fairly robust cryptocurrency exchange, and it is no wonder that this exchange has seen high volume trading in recent years. This British Virgin Islands-licensed exchange offers a wide amount of services to its ever-growing base of users. This exchange offers leveraged trading crypto derivatives in perpetual contracts and quarterly/yearly contracts, as well as a spot market (with no leverage), with the Bybit trading fee for each market being relatively standard compared to the rest of the industry. An attractive referral program along with community-wide events incentivize new users and help to strengthen the community of the Bybit trading platform.