ByBit review 2024: Pros & Cons – CoinGape

Is Bybit Legit?

Legitimacy is the first issue to be discussed in a Bybit review. Bybit provides a thorough and dependable trading platform for futures and cryptocurrencies. With robust security protocols, affordable costs, and an intuitive interface, it has solidified its position as the market leader in exchanges. One of the most reliable unlicensed “off-shore” cryptocurrency exchanges is Bybit. It has operated since 2018 and is well-known for having strong security. To safeguard your funds, Bybit has put several security measures in place. It keeps all customer funds offline in cold storage. To prevent unauthorized withdrawals, it also manually examines each withdrawal request individually. Bybit invites ethical hackers to report any vulnerabilities in its system through a bug reward program. All of its staff have their backgrounds checked as well. Bybit app has made two-factor authentication available to users for withdrawals and account security setting modifications.

Bybit Features

Bybit allows cryptocurrency margin trading because it is a leveraged exchange. For their trades, traders only need to pledge a tiny portion of the starting position as collateral. This implies you must deposit 1% of the trade’s initial notional amount as a margin if your leverage is 100x. You must provide $360 in initial margin for a 10BTC contract if the abstract is $36,000. Leverage on Bybit is freely adjustable, which means that, unlike other exchanges, it can be altered even after a position has been opened. Other features of the exchange will be introduced in the following section of our Bybit review.

Perpetual and Futures Trading

Perpetual trading occurs when you open a trade without immediately exchanging the underlying asset. If your margin continues to be adequate, you can keep the position for as long as you like.

Futures trading occurs when you consent to purchasing or selling the underlying asset of a contract at a predetermined price at a later time.

The settlement time and expiration date are the two primary distinctions between these two.

Perpetual trading allows you greater flexibility in predicting the settlement price and closing the contract because it has no expiration. Conversely, trading futures locks you into a future price and settles on the spot price at expiration.

Inverse Contracts

Inverse contracts calculate margin, profit, and loss in US dollars and confirm transacted quantity in BTC, ETH, EOS, or XRP. The purpose of this Bybit quantity setting option is to eliminate the necessity for manual Sat entry—a shortened form of Satoshi, the smallest unit of Bitcoin.

Perpetual USDT contracts have USDT quotes and settlements. Due to its stability and tie to the US dollar, this asset is advantageous. It indicates that the business issuing it, Tether Limited, purports to back the tokens in circulation with reserves equivalent to US dollars. Unlike other crypto-assets, its value is based on a solid foundation and is less prone to speculation.

The ability to trade any of the following cryptocurrencies using USDT perpetual contracts is another distinctive feature of these contracts:

• BTC
• ETH
• BCH (Bitcoin Cash)
• LINK (Chainlink)
• LTC (Litecoin)
• XTZ (Tezos)
• ADA (Cardano)
• DOT (Polkadot)
• UNI (Uniswap)

Leverage

Leverage is another option available on the platform that must be noted in this Bybit review. Essentially, it allows you to trade with more money than the value of the cryptocurrency wallet’s contents when you employ borrowed funds.

If your forecasts about the cryptocurrency price come true, leverage trading will increase your profits. On the other hand, if the price moves in the other direction, it can increase your losses. It can make every Bybit trade you do potentially profitable with the right approach and amount of luck. If the price of bitcoin increases, for example, purchasing 100 contracts with 3x leverage would quadruple your earnings.

To keep you accountable, your leverage selection may also determine your starting margin. To determine how much collateral is required to open a position, Bybit utilizes the formula: contract quantity / (order price x leverage).

As the contract value you hold increases, the allowable leverage decreases, according to the Bybit app’s risk limit table. Every time the individual contract value increases or decreases, your initial margin needs to adjust in a predetermined increment.

Margins

Regarding the maintenance margin, this is the minimum quantity of collateral required to maintain a position. Your initial margin base rate moves first, and then your maintenance margin base rate.

Controlling your profits and losses and managing your exposure to risk doesn’t only come from Bybit features like take-profit, stop-loss, and hedging (available in USDT perpetual contracts only). Cross and isolated margins are further options.

The collateral you utilize for a trade is unrelated to the remaining amount in your account when you are in isolated margin mode. The only margin at risk of liquidation is the one you put down for an open trade. 

To lower the likelihood of a liquidation, 100% of the equity in the appropriate trading pair coin is at risk while using cross-margin mode. However, you will forfeit it if the available amount falls below your maintenance margin.

You can adjust the leverage with the isolated margin system up to 100x. Bybit determines the effective leverage based on the value of your position and the maximum amount you can lose; you cannot manually alter it using the cross-margin mechanism.

We also found another interesting feature of the platform in our Bybit review. Furthermore, you can safeguard yourself from market manipulation by not relying solely on a single Bybit pricing. Mark Price, which the company derived by combining the worldwide spot price index and the declining financing basis rate, and Last Traded Price, the current market price on Bybit, make up the company’s dual-price mechanism.

Reducing price disparity and protecting platform users from unscrupulous liquidation promotes more equitable trading conditions.

Bybit Type of Orders

On the Bybit app, you can execute different order types:

• Limit: These allow you to choose the order price, leverage, and quantity of contracts. The Last Traded Price will trigger their execution when it hits the predetermined order price.
• Market: You can also determine the quantity of contracts and the purchase price. However, the executed price is set by the best price listed in the order book. They enable you to quickly respond to the volatile price environment and enter or quit the market.
• Conditional: These advance orders will execute automatically upon reaching the Last Traded Price and your designated trigger price. Whereas a conditional limit order waits in the order book until its execution is pending, a conditional market order is filled immediately.

For BTCUSD perpetual contracts, Bybit Mutual Insurance is a risk management solution. You can use it to balance your losses without selling your long and short positions or to optimize your profit potential during an uptrend. The premium plus insurance charge (insurance amount x 0.05%) comprises the total cost of mutual insurance. Bybit mainly uses the Black Scholes model for pricing options, which takes into account the following:

• Insurance amount.
• Volatility of the index price.
• The guaranteed cost of a long or short position.
• Highest possible reward.
• Period of insurance.
• The balance of the Mutual Insurance Fund.
• Settlement may occur in one of three ways (in BTC).
• After two, twelve, or forty-eight hours, the Mutual Insurance expires.
• At any moment throughout the covered term, you manually settle.

You must move Bitcoin from your trading account to your insurance account to purchase one or more Mutual Insurance policies. When you have an open position in a BTCUSD perpetual contract, you can make a purchase. When your insurance account is in isolated margin mode, and there aren’t enough funds to meet the premium, Bybit automatically takes money out of your trading account.

Bybit KYC

KYC is a crucial concern of a crypto platform that must be mentioned in this Bybit review. The Bybit exchange requires identity verification to raise the withdrawal limits to more than 2 BTC daily. Those who fail the KYC can access all of Bybit’s other options. This procedure is a standard industrial procedure used to confirm the identity of clients. Users must usually submit and authenticate personal identity papers, such as a passport or driver’s license, as part of Bybit’s KYC procedure. Users may refer to the official rules and resources of the Bybit app for more information on the necessary ID verification levels.

Bybit Availability

Bybit apps serve clients in over 160 countries globally, offering a comprehensive range of services. This broad range of coverage includes the United Kingdom, multiple European Union member states, Australia, and numerous other areas where bitcoin trading conforms to local laws.

Potential users need to be aware that the availability of Bybit is contingent upon the local laws governing the trade of cryptocurrencies. By guaranteeing compliance with these legal requirements, the platform aligns its services with each nation’s legal and regulatory framework. Users should confirm whether or not utilizing Bybit’s services is allowed in their area, as this might change owing to modifications in regional cryptocurrency laws and regulations.

A few prohibited jurisdictions are the US, UK, China, Singapore, Canada, North Korea, Cuba, Iran, Uzbekistan, Russia-controlled areas of Ukraine (currently including the Crimea, Donetsk, and Luhansk regions), and Syria. Bybit does not provide services or products to Users in these countries.

Bybit Security

The next significant topic to discuss in a Bybit review is the security and safety of the exchange. By using a dual wallet system, Bybit guarantees the security of its users’ money. A smaller portion of user funds is maintained in hot wallets for instant withdrawals and real-time transactions. At the same time, the remainder is kept in cold wallets, which are not accessible from the Internet and are, therefore, safe from Internet hacks. In the event of a compromise of the hot wallet, this guarantees that a substantial amount of user funds would still be secure.

Bybit strongly advises customers to activate 2FA, a vital security feature. It ensures that even if someone knows a user’s password, they would still need a second verification code to access the account by implementing an additional layer of protection using a secondary device or application (usually a mobile device).

Users of the Bybit app can create a withdrawal allowlist, which limits the addresses to which money can be withdrawn. If there is a breach in an account, this protects against illegal withdrawals.

Since Bybit is a derivatives exchange, it offers several tools for risk management in trading. These include employing trailing stops to lock in profits and establishing take-profit and stop-loss levels. Additionally, it replenishes its insurance fund regularly to handle scenarios involving auto-deleverage.

To better protect its users’ assets from malevolent threat actors, Bybit has created a hardware wallet solution that stores them all together in cold storage. Bybit assigns traders complex deposit addresses, in contrast to other exchanges that employ hot wallets, which are cryptocurrency wallets that can be accessed online.

With offline signatures, it completes asset consolidation and withdrawals. Put differently; three manual withdrawal request reviews are conducted daily on the Bybit platform. This stringent procedure helps deter hackers, even though you will get your money later. You can also take money out of your account once every eight hours.

Bybit employs an internal software lifecycle management system with a zero-trust design. The business has enlisted the services of renowned cybersecurity experts to perform penetration testing. It also collaborates with a reliable outside security auditor and upholds the separation of roles. To avoid inside jobs, all Bybit employees must undergo thorough background checks and rigorous security training and assessments.

Bybit Customer Support

As a Bybit review, we must say that the exchange performs excellently in customer support. You’ll find that they provide helpful support and that responses arrive at reasonable intervals. Regarding assistance, Zendesk offers a live chat feature accessible on their platform around the clock.

Bybit app includes support in the languages they have translated their website into. For consumer assistance, email them at [email protected]; for more technical inquiries, email [email protected].  Try the live chat feature to speak with a support professional immediately. While it might take a little longer, email support is just as beneficial.

You can always contact them on social media if you need help getting a response through these avenues. Should you have more direct queries, they have a Telegram channel. If you’d like, you can always Tweet them the ticket number. Of course, you can always check their comprehensive help section if your query is more generic and unrelated to your account. This covers their FAQ sections and other valuable resources that may help your trading.

Bybit Fees

Funding Fee

Bybit maintains the perpetual contract trading price near the spot price as feasible by utilizing its funding mechanism. The way the two prices interact determines who is responsible for paying the funding charge.

Long position holders must reimburse short position holders for the financing charge if the trading price exceeds the spot price. This would encourage more traders to initiate short positions, lowering the cost of trading. However, the holders of the temporary position bear the expense if it falls below the spot price.

Every eight hours, the site accepts payments for the funding fee. 0:00 (UTC), 8:00 (UTC), and 16:00 (UTC) are the settlement timings. The financing rate for the next settlement time is defined as the difference between intervals.

Trading Fees

The trading fee is a determinative feature traders seek to get information about in a Bybit review. Bybit practices maker-taker economics. However, the business gives manufacturers rebates rather than charging them for Bybit trading costs.

As a market maker, your order will increase the market depth and create liquidity. You will receive a reimbursement from the Bybit app. As a market taker, you will remove some liquidity from the record. For that, you will have to pay a Bybit trading cost.

For inverted perpetual contracts for BTC USD, ETH USD, EOS USD, and XRP USD, as well as BTCUSDT USDT perpetual contracts, the actual trading fees and maker rebates are the same. The taker fee is 0.075%, and the maker rebate is -0.25%. The taker fees and all refunds will impact your account balance rather than your starting margin.

Asset Exchange Fee

The 0.1% fixed Bybit exchange charge does not alter based on the quantity of cryptocurrency.

Asset Recovery Handling Fee

You can recover an incorrectly deposited, unsupported coin with Bybit’s assistance.

The business could either convert your coin into USDT and credit your account with it or return it to the original cryptocurrency wallet. In either event, each successful asset recovery case will incur a one-time handling fee of USD 20.

It is a fixed price, just like every other Bybit fee. However, if your coin is valued at least 20 USDT, the company will only assist you in getting it back.

Withdrawal Fee

The withdrawal charge from your cryptocurrency wallet is always the same since the company pays a regular miner fee. Bybit charges fixed transfer costs, but they are more than other cryptocurrency exchanges. More information is available on the Bybit app.

Is Bybit the best crypto exchange for you?

As the final part of our Bybit review, we will explain why and how the Bybit fits traders. For novices, the Bybit Bitcoin exchange is a great option. The exchange provides an easy-to-use trading interface that even a novice can quickly pick up. There’s a great education center with lots of resources for inexperienced traders. In favorable circumstances, traders can also generate passive income. As a result, Bybit may be regarded as a suitable cryptocurrency exchange to begin with.

I am an experienced content writer with 4 years of expertise in the fields of cryptocurrency, forex, and financial markets. Skilled in creating engaging and informative content that educates and informs readers about the latest trends and developments in these industries. I’m dedicated to delivering high-quality content that meets the needs of readers and engages audiences.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.