Key Takeaways
- Bybit is a leading cryptocurrency exchange platform known for its innovative products and services.
- The exchange has a global user base and operates in multiple languages, catering to a diverse international audience.
- Bybit is committed to regulatory compliance and has taken steps to ensure adherence to relevant laws and regulations.
Bybit is among the most advanced and respected cryptocurrency platforms in the cryptocurrency industry. The exchange offers a wide range of services, including derivatives trading, leverage, and inverse trading, among other options.
This guide about Bybit will share all the details about this platform. We will analyze the fees paid by users, the application, and how to use it in different countries.
What Is Bybit?
Bybit is a cryptocurrency exchange that primarily focuses on perpetual contracts for cryptocurrencies. Users can trade with leverage up to 100:1, increasing their exposure to digital assets. As a result, the platform has become a strong competitor to established exchanges like BitMEX, Deribit, and Binance Futures, which also offer futures trading.
Although Bybit is headquartered in Singapore, it is registered in the British Virgin Islands. The platform has obtained various trading and financial licenses to operate in different regions. However, it’s important to note that Bybit is unavailable to users in certain countries, including the United States.
Bybit’s team includes financial experts with experience in traditional finance, though the platform primarily focuses on cryptocurrency derivatives.
Bybit Features
The Bybit exchange has many features that make the platform one of the most advanced for Futures Trading. This review will go through the main solutions offered by this platform and how they are taking care of their clients:
Leverage Trading
The first thing that we can mention about Bybit is related to its leverage possibilities. The platform allows traders to increase their exposure to the crypto market by trading with leverage.
Although this can be very risky, expert traders can enjoy trading with larger position sizes, and they would be able to open 100x trades. What does that mean? That means that if you have $100, you can handle $10,000 in funds. If you open a profitable trade and close it, you will get profits of $10,000 rather than $100. Of course, users need to pay a small borrowing fee.
One of the positive things about the platform is that users can change and modify their leverage once they open a position. Let’s say you open a 20x leverage position, and the trade moves in the right direction. Then, you would be able to increase the leverage and take more risk as the trade moves in the right direction.
Perpetual Contracts
Users would have to use their perpetual contracts to trade with leverage on Bybit. Perpetual contracts are considered a derivative investment tool that allows users to trade a contract (whose price derives from a cryptocurrency) without expiration or settlement date.
Consequently, users can hold their long or short positions open until they consider closing them or until they are liquidated. Additionally, these contracts follow the price of an underlying asset, in this case, a cryptocurrency such as Bitcoin (BTC) or Ethereum (ETH).
Bybit uses a dual price mechanism that prevents possible market manipulation. Users should pay close attention to the “mark price”—the price that will eventually trigger a liquidation—and the “last traded price,” which calculates the price at which the position is closed.
Using both prices reduces the impact of malicious entities on the platform. The exchange also gathers information from other platforms to get an approximate price value of the digital asset at that time.
Moreover, each contract is worth 1 USD. That means that if you open a $100 USD trade, you will be handling 100 contracts. Users should practice risk management techniques to avoid getting liquidated and reduce losses.
Isolated And Cross Margin Trading
You can select cross or isolated margin when you are using this platform. Isolated margin means that you would only be trading in a specific position with the margin you placed. If you have other trades opened, they would not be taken into consideration.
However, if you are trading with cross margin, your other balances (linked to other positions) would be considered. This could be very important to avoid being liquidated beforehand.
Isolated margin is usually handy for traders who want to control each position they trade. It is easier to set up and you would have a clear overview of the situation. However, you can always set up cross margin trading and start getting advanced features to trade with leverage.
Trading Tools
Traders have access to some of the most advanced trading tools on Bybit. Some of them include the following:
- Market Orders
- Limit Orders
- Conditional Orders
- Stop-Entry Orders
- Stop-Loss Orders
- Take Profit Orders
These orders are important for traders to execute their trading strategies. Market orders help users execute their trades immediately at the best price from the order book. This can be an excellent option for users who want to enter and exit the market immediately without waiting for the price of an asset to move.
Limit orders do not drain liquidity from the order book. They allow it to become more liquid and larger, reducing fluctuations in the market and helping increase liquidity for those who want to sell or buy contracts immediately.
When users trade with limit orders, they can select the price at which they want their order executed. For example, they can wait for Bitcoin to reach $50,000 before selling.
A conditional order allows traders to access the market if certain conditions are met. If the price to trigger the conditional order is met, a limit or market order will be executed.
More advanced trading orders include stop-entry orders, stop-loss orders, and take-profit orders. All of them are available on the exchange for users to start using.
The exchange may also add new order types in the future and help advanced traders manage their funds and investments!
Demo Trading
If you do not feel like starting trading immediately after creating an account, you can always use Bybit’s Demo Trading Account. Bybit’s demo account lets you understand how to place orders, change leverage options, and improve your trading.
Trading Bot
Bybit’s Trading Bot is a powerful tool designed to automate cryptocurrency trading. It allows users to execute trades based on predefined strategies without constant manual intervention. By removing human emotions from the trading process, the bots can actually help traders mitigate the risks associated with impulsive decision-making.
Notably, users can customize their bots to suit their specific trading strategies and risk tolerance. However, it’s important to note that trading bots are not a guaranteed path to profit, and inherent risks are involved. Always conduct thorough research and consider your risk tolerance before using trading bots.
Copy Trading
Bybit’s Copy Trading feature allows users to automatically replicate the trades of experienced traders, known as Master Traders. This is an excellent way for new or less experienced traders to learn from the strategies of successful professionals and earn profits without needing extensive market knowledge.
Users can browse through a list of Master Traders, each with their own trading history, performance metrics, and risk profile. Once you’ve selected a Master Trader, you can allocate some of your funds to copy their trades. The system will then automatically execute the same trades as the Master Trader, ensuring your portfolio mirrors theirs.
Bybit Wallet
The Bybit Wallet is a custodial Web3 wallet offered by Bybit. This provides a convenient way for users to interact and manage their crypto assets without the complexities of managing private keys.
The wallet is seamlessly integrated with your Bybit account, making it simple to use and navigate. You can also connect your wallet to various dApps to participate in DeFi protocols, play blockchain games, and more.
Is Bybit Safe?
Security is one of the most important things when analyzing exchanges. Crypto trading platforms allow users to handle large amounts of money, and investors want to know their funds are protected.
In recent years, dozens of crypto exchanges have been hacked. These attacks have resulted in user losses of thousands, if not millions, of dollars. The exchange has taken several measures to protect users’ funds.
Most of these security features were tested in the Bybit beta before launching. Currently, Bybit has the same security standards as most of the largest exchanges in the market.
Multi-Signature And Cold Storage Wallets
Bybit currently uses both cold storage and multi-signature wallets. As you might already know, cold storage wallets allow entities (including exchanges and individuals) to hold digital assets without being connected to the internet.
The private keys linked to this platform’s wallets are stored offline, and only a tiny portion of an exchange’s funds are held in hot wallets (connected to the internet) to provide liquidity.
Additionally, their wallets have multi-signatures. What does this mean? Bybit can only sign a transaction if several parties are involved. No single person controls the wallet, and several members would have to approve a transaction.
This provides another layer of security. Even if a hacker gets physical access to the cold wallet, he/she cannot execute a transaction unless other users sign it.
Insurance Fund
To provide further security to users, the exchange has established an insurance fund. This fund would protect users from trading futures contracts in case a trader is liquidated at a level below the bankruptcy price.
If Bybit is not able to liquidate a trader’s position at a bankruptcy price or better, then the insurance fund would start working. In this way, the trader would be able to return the borrowed funds to the lender.
Encrypted Data
The company’s website uses full SSL encryption for data encryption. Thus, you should always control this information when entering the site. This should be a red flag if you enter a site that claims to be Bybit and does not have SSL encryption.
This would help you spot phishing sites and possible malicious parties trying to steal users’ information, such as email accounts and passwords. You should always avoid phishing sites and control the URL of the website.
Two-Factor Authentication (2FA)
Another thing to mention about the ByBit exchange is the possibility of adding two-factor authentication (2FA). This is an additional feature that users have to protect their accounts. In addition to using an email account and a password, you might be required to use the Google Authenticator app, which would allow you to authenticate your credentials using your phone.
The 2FA can also be activated to withdraw funds or confirm transactions on the platform. In this way, you cannot perform any major activities on the exchange if you don’t have access to your phone. Thus, it protects you from hackers who could have accessed your credentials.Â
Fees
Trading fees are important for traders because they allow them to better plan their strategies. The lower the fees, the easier it is for traders to make profits and maximize their gains. As with most of the exchanges in the crypto market, Bybit uses standard fees when users trade.
That means every time an order gets executed, you must pay a commission for executing the trade. If you place a limit order, you will not have to pay for it unless it gets executed.
Their spot trading fees are structured using a maker-taker model, with a starting fee of 0.1%. This fee can be reduced based on your trading volume and VIP level.
The maker and taker fees are lower for derivatives trading, starting at 0.055% and 0.02%, respectively.
Bybit’s P2P marketplace operates fee-free, allowing direct fiat purchases and sales of cryptocurrencies.
Additionally, the platform offers various funding products like Bybit Savings and Liquidity Mining, which provide interest rates without charging any fees.
It’s important to note that these fees are subject to change, so you should always check Bybit’s official website for the most up-to-date information.
Final Thoughts
Bybit is a platform that offers derivatives trading for cryptocurrencies. It offers attractive fees, and the exchange has recently become one of the largest. Moreover, it offers solutions to clients from all over the world and has a dedicated application for users who want to trade anywhere.
They offer standard security services for the crypto market. One thing is clear: their derivatives platform is among the best in the market, with a wide range of trading orders and several charts and tools that are very useful for traders and analysts.
The registration process is quite simple, and users can start using their demo account to understand better how to trade Bitcoin and crypto derivatives in just a few simple steps!
