In this ByBit review, we compare the pros and cons of this new crypto margin exchange.
We have extensively used ByBit and our goal in this guide is to help you decide if the exchange is a good fit for you.
What exactly is ByBit?
ByBit is a relatively new cryptocurrency exchange that focuses on cryptocurrency derivatives, offering Bitcoin, Ethereum, Ripple, and EOS trading against the US Dollar (USD).
- Up to 100x leverage
- Multiple supported cryptocurrencies
- No KYC required
- Not as liquid as competitors like BitMEX
- US citizens not accepted
Founded in March 2018 and registered in the British Virgin Islands, the founding team of ByBit is comprised of blockchain investors and financial executives, as well as research and development professionals.
The exchange has headquarters located in Singapore and operational offices located in Hong Kong.
Unlike most cryptocurrency exchanges, ByBit focuses on leveraged trading and perpetual contracts, allowing traders to both short and long different cryptocurrencies, and multiply their market exposure to the market.
ByBit serves clients all over the world, offering its services to practically all major countries, except the US and Singapore.
As of writing this ByBit review, the exchange had a reported $940.19 million in daily trade volume according to Coincodex. The best-performing pair is BTC/USD and its worst-performing pair is EOS/USD.
Currently, average daily ByBit volume data isn’t yet available, but will likely be within the $700 million to $1 billion range.
When it comes to margin trading, ByBit is not the first exchange to offer this service, but unlike much of the competition, does offer up to 100x leverage.
Since both CME and CBOE had announced an exit from the crypto-derivatives markets a few months ago, it has become much easier for new upstarts like ByBit to attract new clients.
Some of its direct competitors include more established exchanges like BitMex, Deribit, and OKex. Despite being a new entry to the margin trading space, ByBit more than manages to hold its own against strong competition, and will likely only improve as time goes on.
ByBit coins, leverage and order types
As previously mentioned, ByBit currently offers derivatives for 4 different trading pairs; BTC/USD, ETH/USD, XRP/USD, and EOS/USD.
ByBit offers 100x leverage for its futures trades, meaning a price swing of 10% upwards would actually result in a 1,000% appreciation of the capital employed.
This essentially allows traders to multiply their exposure to price movements, to maximize gains while risking very little.
As it stands, ByBit only offers perpetual contracts, which means the contracts have no set expiry date at which they will be automatically settled.
Being a derivatives trading platform, there is no actual transfer of Bitcoin between buyers and sellers on ByBit. However, contracts are settled in the underlying asset, and quoted in USD.
With ByBit it is important to remember that although there are no maximum caps to the amount that you can trade, there is a cap to the maximum risk limit that is allowed for each asset pair.
For BTC/USD the risk limit is set to 100 BTC, for ETH/USD it is 1,000 ETH, whereas EOS/USD and XRP/USD are set at 25,000 EOS, and 250,000 XRP respectively.
Finally, one big advantage of Bybit is the Take Profit and Stop Loss functions on the platform. Only a few platforms actually allow these functions to be set up in one click.
Another relatively unique feature is the Trailing Stop, which allows the user to track the price of an asset from a specified trailing distance and lock in some profit or minimize loss through the Stop Loss function.
For deposits, ByBit does not charge any fees, though you will need to pay the standard mining fee associated with the underlying blockchain.
Similarly, ByBit doesn’t charge any specific withdrawal fee beyond a standard network fee, which is currently set at 0.0005 BTC, 0.01 ETH, 0.25 XRP or 0.1 EOS.
When it comes to trading fees, ByBit keeps things extremely simple, which makes it an ideal exchange for those that are unfamiliar with how fee calculations work.
Keeping it clear-cut, ByBit simply charges a 0.075% fee for trades that reduce liquidity (takers) and provide a 0.025% rebate for trades that add liquidity (makers).
Beyond this, ByBit also applies a position funding fee, which is exchanged between the long positions and the short positions on the platform.
However, this can be calculated by using (Quantity/Bankruptcy Price) x Funding rate for long positions, or (Quantity/Entry Price) x Funding rate for short positions, where the funding rate is shown in the contract details.
ByBit reviews the funding rate automatically, so be sure to double check this before opening any positions as this can raise or lower over time, and can affect your profitability.
Is ByBit safe?
In our ByBit review, we found that although the CEO of the company is public facing, the rest of the team are not immediately visible when browsing the website.
However, looking at the ByBit company page on LinkedIn, we find a team of at least 22 members, the majority of which are based out of China.
The platform is owned and operated by Bybit Fintech Limited, a company based in Singapore that has been in operation since 2018. Because the platform deals entirely with digital currencies, the exchange does not need to be regulated, and so operates without any licenses.
ByBit provides a good range of additional security options which customers are able to access in their account settings, giving users the option of additional SMS, email and Google Authentication options.
This is roughly in line with the industry standard but is missing some of the more advanced security options like IP and withdrawal address whitelisting seen on some other platforms.
Beyond this, ByBit ensures the safety of user funds by storing 100% of user funds in cold storage, using offline signatures to conduct customer withdrawals three times per day.
One of ByBit’s standout features is its testnet platform, which allows users to test the functionality of ByBit and execute trades without risking their money.
Unlike a cryptocurrency mainnet, which is used for real value transactions, a testnet is a copy of the mainnet that is used for testing purposes.
In the context of a crypto trading platform like ByBit, a testnet is used to make dummy trades that mimic how these would execute if trading live, allowing traders to test the markets.
Rather than using real cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH) for these demo trades, the ByBit testnet instead uses testnet BTC, which can be requested free from one of the myriad testnet faucets, such as the Yet Another Bitcoin Testnet Faucet — which provides a maximum of 0.1 testnet BTC per hour.
After loading testnet BTC to a ByBit testnet account, users will be free to test cryptocurrency trading strategies and play around with all of ByBit’s features, including buying and selling contracts and testing out more advanced order types.
This feature is a rarity among cryptocurrency exchange platforms, as it gives even less experienced users a way to test out margin trading and try their hand at the markets, without any risk.
ByBit Insurance Fund
The ByBit insurance fund is used to protect against auto-deleveraging, which can happen when there is insufficient liquidity in the market, and liquidated positions are closed at a price lower than the bankruptcy price.
In this event, ByBit will use the balance of the insurance fund to cover the difference between the final liquidation price and the bankruptcy price.
The exchange is remarkably transparent about the size of its insurance fund, with ByBit reviewing the balance on a daily basis and updating its current status on the Historical Data page.
Comparing ByBit vs BitMEX in this regard it becomes apparent that ByBit’s current 200 BTC insurance fund is absolutely dwarfed by BitMEX’s almost 30,000 BTC fund.
However, because the ByBit volume is lower than many of its competitors, this should be more than sufficient to protect against losses.
Looking at ByBit vs Deribit, however, we find that despite its small size, ByBit currently has the larger insurance fund, ensuring user are better protected against bankruptcy and are less likely to be forcefully deleveraged.
ByBit Customer Support
As with most exchange platforms, ByBit has an extensive FAQ as its first line of customer support.
Here, basic information about how to use the platform is provided along with some more in-depth articles about the basics of cryptocurrency trading, margin trading fundamentals and more.
Beyond its FAQ, ByBit also offers several different customer support methods, including live chat functionality and dedicated emails for both IT and customer support.
In our testing, we found the live chat support to be relatively snappy and were connected with an agent in just minutes.
Unfortunately, ByBit does not offer any telephone support and handles most of its more technical issues through its dedicated e-mail support.
The platform does have a presence on most social media platforms, including Twitter, Reddit, Facebook, and Telegram, however, ByBit tends to give only cursory support via these channels, instead directing users to its email support. The CEO of the platform, Ben Zhou, is also reachable through Twitter.
Being a relatively new trading platform, there are few ByBit reviews available, so it is not yet possible to get a good indicator of how its customer support performs on average.
However, based on our interactions with the exchange, we have found support to be prompt and courteous.
How to trade on ByBit
1. Sign-up and create account
Like most Bitcoin derivatives trading platforms, ByBit does not require users to complete KYC verification when creating an account, which makes the signup process much less of a chore.
To get started on ByBit, simply create an account here and provide an email address and secure password to register.
After registering, you will receive a verification code to the email address you provided, you will need to enter this code on the previously opened registration page.
Once your account is verified, you will then be able to log in using the email address and password you supplied during this step.
2. Deposit funds
Once logged in, you will then need to top up your account balance to begin trading. To begin, head over to the top left of the website and click on “Assets”.
Next, depending on whether you are looking to deposit BTC, ETH, EOS or XRP, select the corresponding ‘Deposit’ button to load up your deposit address and the corresponding QR code.
Now, you will just need to transfer the required amount of cryptocurrencies to your unique deposit address and wait until it is reflected in your account after reaching the required number of confirmations.
3. Start trading
After your balance is visible in the ‘My Assets’ section of the site, you will be free to begin trading on the platform.
To begin, click the ‘Trade’ button on the website header to open up the trading interface.
Here, you will be presented with the trading chart, order book and order selection screen, among other things.
Here, you will need to select which type of contracts you wish to trade using the drop-down menu in the header. By default, the BTC/USD Perpetual will be selected, but you can also select perpetuals for any of the three other supported cryptocurrencies here.
On the right side of the screen, you will then be able to select your order type, leverage and number of contracts you wish to purchase along with other more advanced order options, before clicking ‘Buy/Long’ or ‘Sell/Short’ to open the position.
After submitting your order, this will either be filled straight away (if a market order) or will be potentially filled at a later date if the conditions for a limit order or conditional order are met.
What are some ByBit alternatives?
Although ByBit is a strong Bitcoin and cryptocurrency margin exchange based on the metrics we used in this review, there are alternatives with very similar functionalities.
Two of the most popular ByBit alternatives are Bitmex and Deribit. Let’s now explore each of the two alternatives in a little bit of detail.
With a daily volume of close to $6 Billion, BitMEX is by far the most liquid cryptocurrency exchange that exists.
The exchange offers leverage trading for a variety of coins like Bitcoin, Ether, Litecoin, Ripple, EOS, Bitcoin Cash and more.
For the smaller coins, the maximum leverage is 20x, while traders can make use of up to 100x leverage when trading Bitcoin.
When comparing ByBit vs BitMEX, it quickly becomes apparent that BitMEX has a significantly larger daily trading volume.
On the other hand, BitMEX is plagued by “overload errors” which make the exchange unusable during periods of high volatility. This is an issue which we have not noticed with ByBit.
With a daily volume of under $500M, Deribit is smaller than BitMEX but still magnitudes larger than most cryptocurrency exchanges out there.
Deribit rose to fame with its Bitcoin and Ethereum “Options” products, which were not available at any other major exchange before Deribit introduced them.
The exchange does not offer any derivatives contracts for altcoins aside from Ethereum, unlike ByBit and BitMEX.
We wrote an in-depth comparison of Bitmex vs Deribit. Make sure to check it out if you are considering to use any of the two bitcoin margin exchanges.
Does ByBit require KYC?
Although ByBit does not require KYC, the exchange does not allow US Citizens to trade on its platform for regulatory reasons.
It enforces this rule by analyzing the IP of the computer a user makes use of to access the platform.
If the exchange was to realize that a user that signed-up is actually from the US, all trades will be automatically liquidated at market price and the account is frozen.