it is an emerging cryptocurrency derivatives margin trading platform, established in March 2018. ByBit is headquartered in Singapore and the company-operated Exchange is registered in the British Virgin Islands.
ByBit’s co-founder and current CEO are Ben Zhou, a crypto and forex expert from Singapore. Before founding ByBit, Zhou worked as the China general manager at XM.
XM is one of the leading forex and CFD trading platform
Bybit’s core team comprises professionals from investment banking, and the Forex industry, as well as being early blockchain adopters.
The technological team has been working for companies like Morgan Stanley, Tencent, Ping’an Bank, and Nuoya Fortune in the past.
Despite its relatively short tenure, Bybit is proving extremely popular among the crypto traders community and building its member base at an impressive rate.
In this article, we will make an in-depth detailed review of the ByBit Exchange discussing services offered by the trading platform. It’s Features, Fees, Trading methods, supported cryptocurrencies, Payment methods, countries supported, and end by analyzing whether ByBit is safe and Legit to trade?
ByBit Services and features
ByBit is a proper cryptocurrency derivatives platform where you can trade perpetual contracts. Now you might be wondering What are derivatives and perpetual contracts? So First let us understand perpetual contracts or also known as perpetual futures and perpetual swaps.
What are derivatives?
The concept of derivatives is originated from Mathematics. It referred to a value or a variable that has been derived from another variable. When we talk in terms of the financial market, the derivative is an instrument that is derived out of some financial market products. Its price is dependent on the value of the underlying asset from which it is derived. In our case, that underlying asset is a cryptocurrency.
When you are trading contracts, you are not buying or selling cryptocurrencies directly but rather a contract that refers to the currency. And when you trade contracts that derive their value from a cryptocurrency these are referred to as the cryptocurrency derivatives.
What are perpetual future contracts?
A futures contract is an agreement between two or more parties to buy or sell the crypto for a set price at a pre-determined time and predetermined date in the future.
For example, you and I can set up a contract to trade 1 Bitcoin for $10,000 or $20000 on a specific date let’s say 1st January 2021. This guarantees a set price for Bitcoin no matter the market value of Bitcoin on the 1st of January 2021. We have to be obliged to the agreement.
Now perpetual contract works the same as futures but with a difference. Unlike futures, perpetual contracts do not have an expiry date.
Hence traders can hold perpetual contracts as long as they want. But as there is no expiry date in perpetual futures contracts it means there are certain other added conditions to meet to maintain the contract. Not fulfilling the required conditions can get your contract liquidated.
Note – Unlike other margin trading platforms leverage can be changed even after opening a position at the ByBit derivatives exchange.
On Bybit trading platform, to maintain your perpetual contract you also need to pay a maintenance margin. On USDT contracts, the Maintenance Margin starting value is 0.5% of the total contract value. As soon as the margin value becomes less than the required value your contract will get Liquidated.
For example, You start a long position of 1 BTC at USDT 10,000 with 100x leverage.
In this case, the initial margin value will be 100 USDT and the maintenance margin value will be 50 USDT. In this case, you can take unrealized losses up to (100 -50) USDT i.e. 50 USDT below this value your contract will get liquidated.
Liquidation and Insurance fund
Liquidation happens when you have depleted your initial margin
When a liquidated order is closed at a price worse than a bankrupt price, Bybit uses the balance of the Insurance Fund to close the gap and mitigate the losses on contracts.
The insurance fund is generally used during extreme market conditions when trades can’t be executed in time to liquidate contracts.
The insurance fund balance increases and decreases depending on the price difference between the final Liquidation Price and the Bankruptcy Price during the liquidations
As mentioned above if the liquidation price is worse than the Bankruptcy Price, the insurance fund will cover the contract loss. And in contrast, When the liquidation price is better than the Bankruptcy Price, the remaining margin will be added to the Insurance Fund. Hence Liquidation fund is funded using a percentage of collateral from liquidated traders.
Bybit has several tools that help traders to avoid the risk of liquidation
Effective stop-loss on the positions prevents the position from reaching the rates to the liquidation level.
Dual price mechanism
To lower the risks of market manipulation on the exchange. Bybit will use a dual price mechanism as the contract reference price by introducing the marked price (global Bitcoin price) which triggers liquidation and the last traded price which calculate the price at which position is closed (ByBit market price)
This mechanism gets activated when a position can’t be liquidated at a price that is better than the bankruptcy priceand the insurance fund is insufficient to cover the gap. In this case, this system can automatically deleverage the position of a trader based on preset settings.
Register at ByBit Trading platform
To get started on Bybit, click on register at the top right corner.
You can create your account either by providing your email address or you can enter your phone number at ByBit derivatives Exchange.
Then add your password and press register. You will receive a confirmation email or SMS on your phone number with a code.
Then confirm your account registration by entering that verification code.
The best part of the ByBit Derivatives trading platform is that you don’t need to get your account KYC verified to start trading.
Deposit and Withdrawal
To deposit funds to your account, go to My Assets. Here you can see all the available coins you can deposit on your account. Select the wallet you wish to top up funds for.
On the right-hand side, you can click on ’Deposit’ and a unique wallet address will be created. Where you need to send your chosen cryptocurrency i.e Bitcoin (BTC), Ethereum (ETH), EOS, Tether (USDT), or RIPPLE (XRP)
Your funds will be reflected in your account only after the first confirmation. So you do have not to wait for long for trading. There is no minimum deposit at the ByBit trading platform.
Likewise, To withdraw funds from your wallet, go again to My Assets and click on Withdraw at the right of the specific coin you want to withdraw.
To withdraw funds you need to set up Google 2-authentication. After setting up 2 Factor authentication. A new screen will pop up where you have to enter the coin wallet address.
The minimum withdrawal is set for each cryptocurrency is usually equal to twice the average mining fee applicable on the network.
ByBit allows withdrawal three times a day, at 8:00 AM, at 4:00 PM, and at 00:00 AM. And every withdrawal request is processed manually.
ByBIT Rewards Bonus – Get a $500 Bonus on a deposit of 1.5 BTC
As I mentioned earlier ByBit is an advanced trading platform that is equipped with all advanced tools and premium technology required from a margin trading platform.
At the top of the screen, You can switch between the BTC, ETH, EOS, XRP perpetual futures contracts as you can sell below.
There is a full-featured chart provided by TradingView where you can select all the indicators and charting tools. Trading view charts help traders in analyzing the trends. You can also follow the market depth at a certain point in time. The order book is updated live on the middle screen.
You can see the live order book and recently executed orders in the middle of the trading interface. On the right, you have the order forms or order types as well as your contact details. You can also see the leverage module. Where you can set the leverage for your order.
ByBIt trading platform is highly customizable and modular. You can detach, resize and move the position of the module anywhere at the interface according to your need.
Scrolling down from the main interface you have other important trading information. You will see the module where you can view your current open positions or orders. On Right, you can see recent market activities and your assets overview
Just right you can see the “ADL ranking” indicator. This will show where your order is currently positioned for potential deleveraging in the case ADL is activated.
ByBit Order matching engine can execute a total of 100,000 transactions per second per contract.
So for every new cryptocurrency or asset they add. Their matching engine will have a capability of 100,000 transactions per second for that newly added asset.
Because of the volatility in the price of cryptocurrencies, it is really important to be able to match both sides of the order book instantly.
Bybit trading platform has advanced order functionality. It allows you to customize your entry levels but it also allows you to manage risk at exit levels.
To place your order, you can see the order form as you can see in the above image. The Exchange allows its users to open both long and short positions.
If you think the price will rise then open a long position, and if the price will fall then open a short position
There are three order types at the ByBit trading platform. Market order, Limit order, and conditional order. You can adjust the leverage, price, and quantity in the order types.
In this order type, you simply select the amount of Crypto that you wish to buy or sell and then place the Long or Short position, accordingly.
The order will be filled at the best available market price of the Bitcoin on the order book.
In the Limit order type, you can set the price at which you wanted your order to be executed.
For example, If a bitcoin is currently trading at $9161. You wanted to open a long position but at a lower price i.e. $9100. You can set the price to be 9000$. Your order will be filled as soon as the Bitcoin price falls to $9100.
When you place a conditional order, you have to enter a trigger price along with the direction, quantity, and leverage.
The trigger is the price at which your order will enter the order book. So, your order will become either a market or limit order once the trigger price is reached.
When you place a limit or conditional order there is a certain order of life. It means how long the order will remain open until it will be killed.Below are the additional order options you can use to maintain the order.
This is an order that won’t be killed until you decided to close it.
In this kind of order type. The order will be filled or executed immediately at the best price.
If some portion of your order doesn’t fill at the best price. That unfilled portion of the order will get canceled. This order type allows partial order execution.
Fill or Kill (FOK)
As the name suggests this order is either filled at the best price in its entirety or not at all. This order type doesn’t allow partial order to be filled or executed unlike (IOC)
On top of these orders options, You can set your limit and conditional order as a “Post Only”. This option will ensure that your order is filled as a “maker” and you will receive the maker fee.
To partially or fully close a position, use a Take Profit Limit Order option, meaning a position is closed when a certain level of profit is met.
You can also set your limit order a “Reduce Only” order. This option ensures that the order will only be executed if it reduces your position. Otherwise, the order will get canceled.
You can set your conditional order type to “Close on Trigger” it can be used in combination with conditional stop losses. This option ensures your stops reduce your position and don’t increase it.
There is also a tool named “position calculator”. This tool calculates your Profit / Loss and ROE on target levels. It can also be used to check your order liquidation level.
Inverse perpetual contract vs USDT perpetual contract at ByBit
ByBit Derivatives Exchange offer two types of perpetual contract. They differ according to what margin is used.
For the USDT perpetual contract, the underlying margin used is Tether.
Tether is a stable coin that is equivalent to 1 USD. So, the dollar value of your collateral will remain the same.
For Inverse perpetual contract, the underlying margin is used in the cryptocurrency itself.
For example, if you are trading BTC/USD Perpetual contract then the margin will be used in the BTC.
The calculated margin and Profit or loss of the USDT perpetual contract are more direct in comparison to the Inverse perpetual contract.
When trading 1 BTC and the price moves by 100 USDT, the profit or loss of the trader will be 100 USDT.
Usually, the Profit and loss chart of the USDT perpetual contract is more linear
The inverse perpetual contract is slightly riskier than the USDT perpetual contract.
Because the margin is calculated in cryptocurrency and holding a cryptocurrency itself involves risk.
On the other hand, USDT perpetual contract uses stablecoin (tether) as margin thus, traders do not have to hedge their position to avoid the risk of holding the cryptocurrency.
If you are trading any contract which is not in Bitcoin. Then that contract has to be an inverse perpetual contract.
The coin used as a margin in an inverse perpetual contract is quoted in USD.
On ByBit derivatives exchange you can trade with as low as 1 USD because each inverse perpetual contract is 1 USD in value.
On the other hand, USDT perpetual contract is written on 1 BTC.
Isolated Margin and Cross Margin
ByBit leverage exchange offers two margin modes to minimize the risk of liquidation. Isolated Margin and Cross Margin
If you select an Isolated margin, it will result in the margin being placed into a position isolated from an account balance. After this, no additional margin is transferred from the account balance to the position.
This minimizes risks if liquidation occurs Because the initial margin used in the position is the only amount you can lose if your position gets Liquidated.
It can be useful in highly leveraged positions and can be used for making quick profits from market volatility.
On the other hand, your order can be liquidated very quickly if the market moves to the opposite side.
Isolated margin is the default option if you use leverage.
When you select cross margin all available balances will be combined to prevent liquidation.
So, if you have open multiple positions for a trading pair then all positions margin will be included if liquidation occurs
Cross Margin is the default option when a position is open without leverage.
Liquidations are a lot less likely to occur if you are using cross margin. However, In case of liquidation, all your balance will be lost
For beginners, the isolated margin is a far better option than cross margin.
It allows you to adjust the margin but you also have full control of your risk in a particular position.
In Inverse perpetual contracts, an isolated margin is set by default
Fees – ByBit Exchange review
There is no deposit fee at ByBit Exchange.
For cryptocurrency withdrawals, you have to pay the miner fee to the network ( no additional withdrawal fee is charged by ByBit Exchange)
There will be a0.1% fee charged for each assets exchange request
Security is the key concern and the operation’s focus ByBit margin trading platform. Below are the security strategies implied by the platform
For those traders that would like to try the platform out in demo mode, they can make use of the Bybit testnet. Demo accounts are a great way to get a sense of how the orders work before depositing funds.
As a derivative trading platform, it is naturally immune from fiat-crypto exchange risks and ICO/IEO related securities policy risks
On top of debt-free operations, the Bybit trading platform has achieved sustainable profitability, making it possible to avoid counterparty and performance risks.
Bybit derivatives exchange restricts the maximum order and position size to protect ordinary traders On top of this, the Dual price mechanism protects traders from wrong liquidations caused by market manipulation.
The “Exchange Transparent Assets” program by BitUniverse allows any user to review Bybit’s platform assets. Bybit Exchange timely reconciles and monitors users’ assets.
To secure your coins on the Exchange. Bybit has built an industry-leading cold wallet system that comes with an in-built solutions hierarchy. Each and every wallet address provided to a user is a cold wallet address. Assets consolidation and withdrawals are completed by offline signatures.
Cryptocurrency withdrawal requests are processed manually
ByBit employees are subjected to stringent background checks, compulsory security training, and assessment for internal security control.
For your account security, two-factor authentication is provided either with SMS authentication or Google two-factor authentication app
The email address linked to your account cannot be changed or altered for any reason to ensure your account access security
ByBit promises that the data of accounts and transactions will never be compromised due to a system error. Otherwise, ByBit guarantees to bear the full cost of such error.
Conclusion – Is ByBit Safe And Legit To Use?
Although ByBit is relatively a new derivative trading platform. But Exchange has become extremely popular among the crypto community quite quickly. The platform focuses greatly on security and did its best to ensure the safest possible trading environment you can achieve in derivatives margin trading.
ByBit is without a doubt a safe and legit exchange to use and trade derivatives. ByBit has emerged as a strong alternative to more established margin trading platforms such as BitMEX.
ByBit is a well-built platform with an intuitive trading interface including a solid range of technical, security, and trading features
ByBit testnet allows extensive demo trading experience for both beginners as well as pro-crypto traders to learn ins and outs of the perpetual contracts and get used to the real trading environment of the platform
No KYC requirements along with no deposit or withdrawal limit suits traders looking to trade in huge amounts anonymously.
The high liquidity of the platform allows traders to take advantage of crypto market volatility by making swift deposits to the platform
The recent addition of the Fiat gateway to buy Ethereum and Bitcoin with Fiat currency provides a nice touch to the platform. And allows traders to buy Bitcoin with multiple payment methods directly to their account
ByBit derivatives exchange has been able to build a loyal community of crypto traders in such a short time. And If you want to enter the world of margin trading then ByBit won’t prove a bad decision.
Note – If you are a beginner then at least spent a few hours on the ByBit testnet demo trading platform
ByBit Exchange offers a multitude of bonuses for new and active users up to $90. There is a $50 deposit bonus for new users. To claim the bonus, you have to follow their social media channels, and actively trade for continuous 10 days. There are also regular weekly offers and promotional bonuses.
What is ByBit TestNet?
ByBIT Testnet is for those traders who would like to try the platform out in demo mode. Demo accounts are a great way to get a sense of the platform and get used to the basics of trading without depositing the funds. You can access their testnet on testnet.bybit.com. To fund your account, you have to claim coins from the ByBit Testnet faucet.
What are the best alternatives to the ByBit derivatives trading platform?
Bitmex, OKEx, Coinbase, PrimeXBT, and Cex.io are a few of the best alternatives to the ByBit derivatives exchange.
Does ByBit exchange is available in India?
Yes, ByBIT offers its services in India. You can even buy bitcoin with UPI in INR from the Exchange.
Which countries are not supported by ByBit Exchange?
ByBIT Exchange is available worldwide other than the United States, Cuba, Quebec, Crimea, Sevastopol, Iran, Syria, North Korea, Antigua, or Barbuda.
Hello, I am Harsh Vasistha B.tech (IT) from New Delhi, India. Owner and chief author of the Coinexpansion (An Altcoin & Exchange Hub) and Cryptopickup and also run a YouTube vlog https://harshunveiled.live. In fact, I am not a techie but got infatuated with blockchain technology. Coinexpansion is the product of my cryptocurrency learning lust.
Hobbies - An avid reader, knowledge seeker, sports addict, and obsessed with learning diverse stuff.