Bybit Review 2024 - Bitcoinsensus

Bybit: A Deep Dive into the High-Risk, High-Reward Derivatives Exchange

Bybit is a cryptocurrency exchange specializing in derivatives trading, offering advanced tools for experienced traders seeking high-potential returns.
The platform prioritizes futures, perpetual contracts, and options, emphasizing margin trading with inherent risks and rewards.
While offering limited spot trading, Bybit boasts features like automated bots, staking options, and crypto-collateralized loans.

Introduction to Bybit

Bybit boasts top-tier security, but also some of the riskiest high-leverage trades available. This review analyzes every aspect of this advanced trading platform to help you decide if it aligns with your risk tolerance.

Bybit prioritizes derivatives trading, a complex investment form that magnifies potential gains and losses. Access is restricted in several countries, including the US, UK, and Canada. Despite limited spot trading options, the platform provides a wide array of products like perpetual contracts, liquidity mining, and dual asset trading.

Today, we dive into the multifaceted Bybit exchange to assess its value. We’ll weigh the platform from beginner and veteran trader viewpoints, and scrutinize Bybit’s background.

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Advantages

High liquidity: Bybit has substantial trading volume, which results in tighter spreads and better order execution.
Advanced trading features: Margin trading, derivatives (futures and perpetual contracts), and sophisticated charting tools are available for experienced traders.
Leverage: Bybit offers high leverage options (up to 100x), allowing for potentially larger gains with smaller investments.
Low fees: Generally competitive trading fees compared to other major exchanges.
No KYC for basic use: You can start trading with a minimal sign-up process, without going through full Know Your Customer (KYC) verification.

Disadvantages

Potential for high losses: Leverage trading, while potentially increasing profits, significantly amplifies the risk of losses.
Complexity: The platform’s advanced features may be overwhelming for beginner traders.
Not suitable for US residents: Bybit does not fully serve traders based in the United States.

What is Bybit?

Ben Zhou, a former international currency broker, founded Bybit in 2018. Originally based in Singapore and Hong Kong, the exchange currently operates from the United Arab Emirates and is incorporated in the British Virgin Islands.

The exchange sets itself apart from competitors by focusing heavily on derivatives trading. While simple trades are possible, the platform emphasizes margin and futures trading with the accompanying high risk and potential reward.

The exchange offers futures contracts (with settlement dates) and perpetual contracts (held indefinitely). Both provide the chance for substantial gains, but also expose you to losses which may exceed your initial investment.

The exchange boasts a capacity of 100,000 trades per second with 24/7 uptime. Bybit maintains an impressive security track record, remaining one of the few major exchanges never hacked.

While not technically illegal, US residents face restrictions on Bybit. Previously, accessing Bybit via a VPN was a workaround, but the exchange implemented mandatory Know-Your-Customer (KYC) protocols in May 2023.

The US isn’t the only country with limited Bybit access. The exchange has proactively withdrawn from markets like the UK (2021) and Canada (2023). Due to regulatory pressure, Japan may be next on the list. Additionally, Bybit is unavailable in certain countries like China, Russia, Iran, and North Korea due to external sanctions.

Bybit Trading Experience

Bybit limits spot trading options, offering direct purchase of only 27 coins—a stark contrast to most other exchanges. You can use the platform to purchase a wider range of cryptocurrencies (over 400 supported trading pairs).

However, derivatives trading is where Bybit stands out. The exchange offers over 250 contracts across perpetual, inverse perpetual, futures, and options categories. Its derivatives market covers a diverse spectrum of blockchain applications, including metaverse coins, NFTs, Ethereum staking, and decentralized finance (DeFi).

Crypto Trading on Bybit

While Bybit shares some basic layout elements with other exchanges, it quickly reveals its focus on advanced trading. You’ll find a streamlined option for spot purchases, a dedicated tab for peer-to-peer (P2P) trading, and a free crypto-to-crypto conversion tool. Bybit also allows users to deposit fiat and hold it without immediately converting to crypto.

The trading interface, though less cluttered than certain competitors, provides a comprehensive array of indicators and a real-time order book. These resources empower active traders to conduct in-depth market analysis and strategically manage their crypto assets.

Bybit sets itself apart with features like a time-weighted average price (TWAP) tool, allowing users to schedule long-term orders with greater price accuracy. Additionally, its copy trading functionality lets you automatically mirror the trades of successful investors.

Bybit Derivatives

Bybit provides four main types of derivatives. Futures contracts, familiar from non-crypto trading, bind you to buy or sell an asset at a set price on a future date. Traders aim to profit by either going long (predicting a price increase) or short (predicting a price decrease).

Perpetual contracts are similar to futures contracts but lack an expiration date. You can theoretically hold these positions indefinitely, as long as you maintain sufficient funds to cover fees. However, substantial price drops can still result in significant losses.

Inverse perpetual contracts differ from regular futures contracts by using cryptocurrency (instead of fiat currency) as the settlement asset. They are useful for increasing your exposure to specific cryptocurrencies like BTC.

Finally, Bybit offers USDC options. Like futures, options contracts come with an expiration date. However, the holder has the right, but not the obligation, to execute the trade upon expiry. Bybit’s options contracts all use USDC as the settlement currency.

Trading Fees & Rates

Funding fees apply to perpetual and inverse perpetual contracts on Bybit. These fees are exchanged between long and short position holders to help maintain the contract price in line with the underlying asset’s price. Bybit calculates the funding rate every 8 hours, and the rate can be positive or negative. This means you either pay or receive the fee depending on your position and the overall market sentiment. You can view current and historical funding rates directly on Bybit’s website.

Bybit uses a maker-taker fee model for both spot and derivatives trading. Makers provide liquidity by placing limit orders and typically pay lower fees, while takers consume liquidity by placing market orders and generally incur higher fees. Your trading fee tier depends on your 30-day trading volume and whether you hold any Bybit tokens (BIT). Higher trading volumes and BIT holdings lead to lower fees. It’s important to note that fees on derivatives contracts might vary depending on the specific asset, and Bybit sometimes runs fee promotions or adjustments.

For up-to-date fee information, you may refer to Bybit’s Trading and Funding Fee Structure page.

Bybit Trading Bot

The exchange also stands out with a native interface for trading bots. This eliminates the need for third-party API connections and lets users easily design bots with simple parameters for automated trading (with the understanding that risk management is still essential). Tap into pre-built trading bots or fine-tune your own custom strategies. Unlock extra capital with crypto-collateralized loans—deploy them for high-risk, high-reward margin trading, boost staking yields, or even transfer directly to an external wallet.

Bybit Staking and Savings

It offers diverse earning opportunities beyond traditional staking—explore liquidity mining, dual asset strategies, and staking on Ethereum 2.0 stETH token. Liquidity mining lets you earn rewards by supplying the exchange with liquidity, though current yields fluctuate depending on market factors.

For those seeking calculated risk management, dual asset trading allows you to lock in a target price for a coin, maximizing your returns if the market moves in your favor. Additionally, it supports staking of stETH, a liquid representation of staked Ethereum, offering daily yields averaging 4% annually.

Finally, Bybit’s Launchpool incentivizes early investment in new tokens with potentially lucrative staking rewards. Note that Launchpool rewards can vary significantly per token and depend on market conditions.

Bybit Review: Our Verdict

Bybit stands out as a haven for experienced crypto traders who crave advanced tools and diverse earning strategies. Its focus on derivatives trading, customizable bots, and flexible crypto loans sets it apart from exchanges catering to beginners. If you seek high-risk, high-potential returns through futures, options, and perpetual contracts, Bybit offers a powerful platform.

However, Bybit is not an ideal starting point for those new to cryptocurrency. Its emphasis on complex financial instruments carries significant risks if not approached with knowledge and caution. Ultimately, Bybit rewards those who understand the cryptocurrency market, possess a calculated risk appetite, and desire flexibility in their trading strategies.

FAQ

What Is Bybit?

Bybit is a Dubai-based cryptocurrency exchange specializing in derivatives trading like futures and perpetual contracts.

Is Bybit a Chinese Company?

No, Bybit is headquartered in the United Arab Emirates. While founder Ben Zhou has ties to China, the exchange has no Chinese ownership.

Can US Traders Use Bybit?

Bybit is not licensed in the US. While US traders previously accessed it with a VPN, Bybit now enforces KYC requirements, barring US-based users.

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Bybit Review 2024 – Bitcoinsensus