Bybit is a newcomer to the cryptocurrency exchange industry. Based in Singapore and registered in the British Virgin Islands, they specialize in margin trading and perpetual futures contracts. Contracts involve pairing the USD against Bitcoin, Ethereum, Ripple and EOS. Launched in 2018, Bybit got a lot of positive press right out the gate due to its robust trading engine that can facilitate as many as 100,000 transactions per second. This is in stark contrast to many established crypto trading platforms that are notorious for delays, particularly during periods of peak activity when fortunes could be made or lost in seconds.
Best Leveraged Trading Exchanges
Bybit is not only one of the newest cryptocurrency exchanges. It’s also one of a rash of new exchanges that has decided to take on industry leader BitMEX by offering leveraged trading of up to 100x. Just to add an extra layer of incentive to lure traders away from BitMEX they allow those leveraged trades to be adjusted after the position is opened. Something you won’t find as of this writing on any other cryptocurrency exchange. Bybit also allows 100x leveraging on Ethereum contracts. Something else you won’t find on BitMEX.
Ripple and EOS futures contracts are limited to a max multiple of 25x. But while that might seem a bit timid compared to the 100x margins on Bitcoin and Ethereum, it’s actually more than you’ll find most anywhere else. The takeaway here is that Bybit is intent on going all-in with their attempts to lure traders away from BitMEX. Will it work? Only time will tell.
Deposits and Withdrawals
Of particular note to many traders is the fact that there are no KYC (know your customer) protocols in place at Bybit. That means you won’t have to submit any documents affirming your identity. You can also start trading as soon as your account is verified.
That said, like many other cryptocurrency exchanges, Bybit does not allow deposits in fiat currency, and there is no mechanism for purchasing applicable cryptocurrencies during the account setup. You will need to bring either Bitcoin (BTC), Ethereum (ETH), EOS (EOS) or Ripple (XRP) to the party or you will be denied entry.
There are no minimum deposit amounts and no fee for depositing funds. Unless, of course, you trigger a blockchain mining fee. But that is beyond the control of the exchange.
When it comes to withdrawals, Bybit has instituted minimums for each of the four cryptocurrencies it supports. Those minimum withdrawal amounts are:
- 0.0005 Bitcoin
- 0.01 Ethereum
- 0.1 EOS coin
- 0.25 Ripple
Liquidation occurs if you are approaching the point of depleting your margin, and the liquidation price kicks in. In such a case the trade is liquidated with any remaining margin being transferred to the Bybit insurance fund.
In some cases, the Bybit insurance fund may be unable to fulfill its intended role in which case the platform’s auto deleveraging mechanism kicks in to stop the bleeding and ensure the liquidity of the exchange. When this happens, the most profitable traders would be required to liquidate a position in order to cover the losses of the liquidated trader.
While you will find few traders enamored of this system, it is actually quite common. And because of the intense volatility of the cryptocurrency markets, quite necessary. The company states the every effort is made to avoid this from occurring, but in some cases, there is simply no viable alternative.
The Bybit trading platform is up to date and uncluttered. You see the real-time value of your chosen cryptocurrency, along with the current order book, recent trades, contract details, and a broad overview of market activity. Everything is logically laid out, and you get to see all the particulars of your order before it is executed. There’s a bit of customization possible in the display, but really, if you’re getting confused with so few components in play, you probably shouldn’t be trading cryptocurrency derivatives.
As is standard operating procedure with any decent crypto exchange these days, the vast majority of assets held by Bybit are secured in cold wallets deposited in safe deposit boxes at undisclosed banks. Only a small percentage of funds are kept in hot wallets to enable withdrawals. And all withdrawals are manually verified before being allowed to proceed. Bybit also implements security checks by industry favorite SlowMist.
Pump and Dump Protection
Although the number of Pump and Dump raids has been increasing in recent years few crypto trading platforms have responded with much urgency. Bybit is one of the few exceptions. Their “isolated margin” function is specifically designed to sniff out pump and dump attacks and short circuit them before they can be executed. If you are unfamiliar with this type of currency manipulation, it typically unfolds like this:
- Members of a pumping group are recruited via various internet channels. Once the potential raiding party reaches critical mass (typically about 1,000 members) they are ready to pounce.
- The admin of the group lays out all the details, including the exchange to pump, the time and date and the token. Though the token is usually the last detail released.
- The group hits the exchange at the appointed time, and typically in just over a minute, they are able to increase the value of the cryptocurrency by as much as 25%.
- In most cases, at around the 70-second mark, the pump becomes a dump, and within a few minutes, most positions are unwound.
Organizers, knowing all the details in advance, typically buy up large amounts of the target coin in the days prior to the pump. As a result, they typically wind up with profits as high as 20% or more. As we mentioned, Bybit is one of the few exchanges with protocols in place to prevent pump and dumps.
Conclusion: Is Bybit Legit
Bybit is particularly keen to carve out a niche in leveraged trading and offer margin trading in some cryptocurrencies BitMEX and others do not. Their hyper-fast trading engine and robust security are other factors in their favor. As they have only been around since 2018, however, the jury is out on whether they will be able to challenge BitMEX for market supremacy.