By: Cooper Haywood
Established in 2018 and registered in the British Virgin Islands, Bybit is a cryptocurrency futures trading platform.
In fact perpetual swap futures are their only product!
While Bybit does allow for an exchange between the four currencies that they support on their platform, they don't allow their users to purchase any cryptocurrencies with fiat payment methods.
This narrow focus on perpetual swap futures works well for Bybit, however, and they have seen a steady increase in their trading volume in the last year. Bybit's main competitors are other crypto derivatives platforms like FTX and Bitmex.
Bybit Pros
- No KYC makes registration a breeze, it's very easy to start trading on Bybit.
- Unlike some other cryptocurrency exchanges Bybit has a mobile app, making it easy to trade when away from the computer.
- Bybit is one of only a handful of exchanges that offers perpetual swap futures for coins like XRP and EOS.
- On Bybit it's possible to trade with extremely high leverage, especially on Bitcoin products.
- Low trading fees, including a rebate for the market maker.
- The Bybit insurance fund guarantees that losses will not have to be socialized throughout the Bybit ecosystem.
- Multiple order types makes Bybit suitable for advanced traders and investors.
Bybit Cons
- It's only possible to trade four coins on Bybit and the exchange has not announced their intention to support any more.
- Bybit is blocked to US citizens.
- It's difficult to verify that Bybit's volume statistics are actually accurate so it's hard to know for sure how much trading is actually happening on the platform.
- Bybit does not support fiat purchases of cryptocurrency.
- Lack of tokenized stocks means users need to withdraw crypto, convert to fiat on another platform, and deposit into a traditional online broker, in order to purchase stocks like Tesla, Amazon, Netflix, Google, Facebook etc.
The Bybit Company
Although Bybit is registered in the British Virgin Islands their headquarters are in Singapore. They also have offices in Hong Kong and Taiwan.
While their clientele is primarily Asian, Bybit also caters to the European cryptocurrency market. Bybit's CEO is Ben Zhou and the company encourages their users to reach out to him on Twitter.
Trading on Bybit is easy as they have a great UI interface as well as a comprehensive trading view. Registration is simple and takes just a couple of minutes. To begin this review we'll address one of the questions that's asked the most about Bybit...
Is Bybit Legit?
Since many cryptocurrency traders have never heard of Bybit it's normal to ask is Bybit safe?
The answer is yes, Bybit is very legit. They have never been hacked and Bybit takes a number of precautions to ensure optimal trading security on their platform.
For example, they have a policy that mandates that cryptocurrency can only be withdrawn three times per day. That prevents a hacker from gaining access to an account and instantly draining it. By only allowing withdrawals a few times per day it gives a person with a compromised account time to lock it so that no withdrawals can be made. Bitmex has a similar feature, however, they only allow withdrawals once per day.
Bybit is also very careful with how they store their cryptocurrency. For instance, when users deposit funds on Bybit the crypto is sent directly to a cold storage wallet. The advantage of a cold storage wallet is that it's exponentially more difficult to hack than a "hot wallet." Most of the time when funds are stolen from an exchange, they are stolen from the exchange's hot wallet.
Can US citizens use Bybit?
Unfortunately American citizens cannot use Bybit. This is due to the lack of regulatory clarity within the United States and the fear of being sued by one of America's regulators like the SEC.
The ban on Americans is enforced by an IP address geo-ban. That is, any American IP address is automatically blocked from using the exchange. Some enterprising users have figured out that's it's possible to circumnavigate this ban by using a VPN. While this is possible it's also risky.
Should Bybit discover that an account is American and accessing the exchange through a VPN, they may freeze the account and the trader may not be able to retrieve their funds.
International Support
Bybit is proud of their international user base and currently they have more than 100,000 users registered on their platform. To cater to that international crowd Bybit can be accessed in the following languages: English, Chinese, Traditional Chinese, Korean, and Japanese.
As Bybit is headquartered in Asia it makes sense that their clientele is largely Asian. Unfortunately, it's not only Americans who cannot access Bybit.
KYC on Bybit and Countries Banned from Using the Exchange
Bybit does not have a KYC policy, they enforce their geo-ban by checking the IP addresses of their users. Besides Americans there are several other countries which are blocked from using Bybit.
Citizens of Québec (Canada) , Singapore, Cuba, Crimea, Sevastopol, Iran, Syria, North Korea and Sudan cannot use the exchange.
What Services Does Bybit Offer?
As mentioned, Bybit is different than other cryptocurrency exchanges in that their only product is perpetual swap futures.
A traditional futures product has an expiration date. On that date the contract is closed and any difference in price is paid out. A perpetual swap futures product, however, has no expiration date so that a trader can hold it for as long as they want.
Currently Bybit offers a perpetual swap futures product on four different coins: Bitcoin, EOS, Ether and Ripple XRP. While that's a very limited number of trading options, these trading products are fairly difficult to find and not many other trading platforms have them.
Margin Trading
Another one of Bybit's interesting features is their leveraged trading. Bybit offers high leverage trades, up to 100x leverage on their Bitcoin perpetual swap futures.
With that much leverage just $1 down exposes a trader to $100 in Bitcoin volatility. It's an easy way to make money quickly, and an even easier way to lose money quickly. Even the smallest shift in price can wipe out a trader's position when they use 100x leverage.
Nonetheless for the experienced trader that much leverage may be just what they're looking for. More information about margin trading on Bybit is available here.
Margin Trading Limits
Although Bybit offers very high leverage trading there are limits. For instance, the only 100x leverage trade available is for the Bitcoin perpetual swap future, and that trade has a maximum limit of 150 BTC. The maximum amount of leverage that can be used for Ethereum is 50x and that trade has a limit of 3,000 ETH.
The same 50x leverage limit also applies to Ripple XRP and EOS trades. Presumably this limit is in place as Bybit believes that these altcoins are more volatile than Bitcoin and too much leverage would simply be too risky.
Buying With Fiat on Bybit
Currently Bybit does not accept fiat deposits of any kind. No debit cards, wire transfers or bank transfers. Some people have asked how to buy on Bybit but this is not possible. The only way to trade on Bybit is to send cryptocurrency to the trading platform.
That's why the best way to trade on Bybit is to acquire crypto on an exchange like Coinbase or Kraken and then send it to the Bybit exchange.
The one good thing about Bybit is that they accept deposits in all of the currencies that they trade, BTC, ETH, XRP and EOS. That's different than Bitmex which only accepts BTC deposits even though they trade a number of different currencies on their platform.
Why is Bybit Special?
Bybit is definitely not your average cryptocurrency exchange and there are several features which set them apart from other platforms. The first of these features has to do with how they execute trades.
The Bybit Matching Engine
A matching engine is one of those things that most traders don't think about until it starts to go wrong. Thankfully the likelihood that Bybit's engine ever fails is very low. The Bybit trading system is designed to handle in upwards of 100,000 transactions per second which is enough to handle even the most intensive traffic. Bybit also claims that trades are executed within 10 microseconds to prevent slippage.
This superior technology results in great uptime and Bybit claims that their exchange availability is currently 99.99%. Should anything go wrong, or should the matching engine improperly execute a trade, Bybit promises to bear the cost of any error.
Affiliate Program
Bybit has an affiliate program to encourage their users to recruit friends and family to the platform. When a trader recruits someone else to the platform they will receive up to 30% of that person's trading profits.
There is even a sub-affiliate program so that when someone signs up a friend, and that friend signs up someone else, the original trader receives 10% of the trading fees from the friend's referral.
Bybit seeks to make it easy to recruit people as well as they promise a $60 bonus to new users, provided that they meet certain conditions. In this case, to receive the bonus a new user must deposit at least 6 ETH or 0.2 BTC into their account. Bybit also offers a number of other smaller bonuses as well. More information on their bonus program is available here.
To date Bybit has paid out more than 200 BTC in commission rewards which illustrates that their affiliate program is not just for show, it's an important part of Bybit's recruitment strategy.
Trading Competitions
One other interesting feature which sets Bybit apart from other exchanges are the contests that they hold. Bybit regularly sets up trading contests. Users can join these contests and they only thing they need to do to qualify is hold a minimum account balance, typically 0.05 BTC.
The contests are team events with a designated leader. If a team wins the team leader typically receives 30% of the prize money and the rest of the winnings are split evenly between everyone else on the team. Depending on the contest rules and how many people enter it, the prize pool may be as high as 100 Bitcoin.
Bybit regularly hosts these contests and they're a fun way for users to potentially win some Bitcoin by trading well. For more information it's possible to check out the announcement pages for some previous contests, including the BTC Brawl Competition and the Japan Trading Competition.
Trading on Bybit
The first thing to consider when looking at Bybit trading is how much liquidity the exchange has. According to their own metrics they're currently clearing about $500,000,000 in daily trading volume. It's very difficult to know if this number is accurate however. That volume of trading would mean that they're more popular than Binance, generally considered the biggest cryptocurrency exchange in the world.
In addition to claiming such a high volume, CoinMarketCap doesn't report on Bybit's volume which is slightly suspicious. CMC has volume figures for most major exchanges and to not be listed there is strange.
All of that being said, whether Bybit is clearing $500,000,000 a day or $50,000,000 a day, it probably makes little difference to the average retailer trader reading this Bybit review. When trading a few hundred dollars at a time liquidity is rarely a problem. Determining accurate liquidity only starts to matter once the trade size starts to become significant.
Trading Fees on Bybit
Bybit has a fairly unique trading fee schedule. The market taker pays a 0.075% fee for the trade while the market maker receives a 0.025% rebate for the trade.
This type of trading fees scheme encourages people to set limit trades instead of mashing the market buy or sell button. It is a trading fee schedule most often seen on derivatives exchanges. Crypto-to-crypto exchanges rarely use this kind of trading fee schedule.
In terms of Bybit fees for withdrawals, the exchange doesn't technically have any. What they do have is a "miner fee." That is, a fee designed to pay for the cost of a transaction on the network. The miner fee is as follows: 0.0005 for BTC, 0.01 for ETH, 0.25 for Ripple XRP, 0.1 for EOS and 5 for USDT.
Naturally these miner fees are higher than the average transaction costs for the respective coins and Bybit happily pockets the difference.
Bybit Insurance Fund
The insurance fund is designed to cover a loss in the event that a position is closed at, "worse than bankrupt price." In practice what that means is that if a trade goes below zero before it can be taken off, the insurance fund will cover that loss.
Some exchanges use a socialized loss scheme instead of an insurance fund. That's a scheme whereby a loss from a trade is taken out of the profits of all of the traders on the exchange. Socialized losses are extremely unpopular, for good reason, so it's a good thing that Bybit has an insurance fund.
More information on Bybit's insurance fund is available on their website.
Cross Margin
Cross margin allows Bybit to use all of a trader's balance in their wallet in order to avoid liquidation. It's a helpful tool as in some situations it can be the difference between being liquidated or not. More information the exact functioning of cross margin can be found here.
Order Types
As any professional derivatives exchange should, Bybit has a wide variety of different order types. Naturally they have a limit order and a stop loss order but beyond that they have a few more complex order types.
A post-only order, for instance, will only place an order if it will go to the order book so that the trader will receive a rebate. If the order will skip the order book and trade (for a fee) as a market order, then it will not be posted.
A close on trigger order is designed to execute no matter what, even if there is insufficient margin for the trade. It does this by cancelling other trades on the books, freeing up additional margin for this more important trade.
More information on these order types, as well as others, is available on Bybit's website.
The Mobile App
Bybit recently released a brand new mobile app for both Android and Apple. The app is specifically designed to offer nearly the same number of features as the regular Bybit platform.
Via the app it's possible to trade any of the four crypto futures products that Bybit offers, as well as swap between the four currencies. There are all of the standard trading tools on the app just like the platform, including a stop loss and take profit from entry option.
Perhaps the two most convenient features of the app are as follows. One is the ability to receive price notifications, making it easy to keep up to date with the latest price action. The other is instant customer support right from the app. Bybit is proud to announce that they now have customer support in the following languages: English, Chinese (Mandarin and Cantonese), Japanese, Korean, and Russian.
While new apps have a tendency to be buggy and not always work as promised, so far the reviews of the Bybit app are good and traders are definitely finding it helpful.
Customer Support
Besides the mobile app it's also possible to get customer support from Bybit via their email address: [email protected] or by contacting the 24/7 customer support team.
Before contacting the team, however, it may be helpful to check out the Bybit support page. Here there are dozens of articles on a wide variety of different topics so that whatever questions you have they might already be answered here.
Finally, there is a trading chat group for Bybit on Telegram. Presumably this is more of an informal group chat and not really designed for support purposes, however, other traders may be able to solve easy problems.
Start Trading on Bybit Today
We decided to write this Bybit review due to an increasing interest from traders in crypto derivatives. With exchanges like Coinbase and Kraken already providing excellent crypto-to-crypto exchange services it's been left up to exchanges like Bybit.com to offer futures products, especially perpetual swap futures.
Although Bybit isn't a household name like Coinbase they've been operating for several years, have never been hacked and have an excellent safety record. They also have a fairly deep order book which can provide plenty of liquidity to all but the largest of retail investors.
Perhaps the best feature of Bybit is that instead of just offering BTC / ETH futures products they've also created XRP and EOS futures. For anyone looking to trade futures for these coins Bybit is a great option. With their multiple order types, insurance fund and excellent matching engine Bybit is definitely a good trading platform to work with whether you're new to trading or already have years of experience.
