Bybit Review – Bitcoin Futures edition

Established in March 2018, Bybit is one of the fastest-growing cryptocurrency derivative exchanges with more than a million registered users. Built on customer-focused values. They aim to provide professional, smart, intuitive and innovative trading experience to better serve our customers in a timely manner.

The products currently available on the Bybit platform include BTC/USD, ETH/USD, XRP/USD, EOS/USD and BTC/USDT perpetual contracts.

Bybit provides decent future volumes when it comes to cryptos. As of January 2021 Bybit had a daily trading volume of more than $10 billion in BTC Futures according to Coinmarketcap.

Bybit Crypto Derivatives

Derivative trading with leverage allows traders to enter positions larger than their wallet balance and to enter short positions. Both profit and loss will be accelerated if a trader trades more than 1x leverage. In order to trade with leverage, trades will operate on margin. Margin refers to the amount of capital that is required to enter a leveraged position.

Bybit Inverse Contract

The Inverse contracts use BTC/ETH/EOS/XRP as the base currency. Traders need to confirm traded quantity in terms of USD and then use their base currency (such as BTC, ETH) to calculate margin, profit and loss. If a trader wants to trade BTCUSD contract, he must use BTC as his base currency. If he trades on ETHUSD contracts, he needs to hold ETH. Inverse Perpetual Contracts are quoted in USD, but all the profit & loss will be settled in base currency (BTC and others). Each contract is 1 USD value. This feature is specifically designed to provide convenience to all traders as it allows trades as low as 1 USD to be easily keyed instead of inputting a string of decimal places in BTC such as 0.000XX BTC.

Long position Profit & Loss = Contract Value x (1/Entry Price – 1/Exit Price)

Bybit Perpetual Contract

USDT perpetual contract is a linear contract. The margin used for a linear contract is USDT. On the other hand, an inverse contract means if a trader would like to trade BTC/ETH/XRP/EOS contract, the underlying cryptocurrency has to be used as the margin to trade the respective contract.

Inverse perpetual contract is traded based on the underlying cryptocurrency. Traders need to hold a much volatile BTC/ETH/EOS/XRP as margin. Hence, even if traders choose not to trade, holding the cryptocurrency itself involves risks. On the other hand, USDT perpetual contract uses stablecoin as margin and thus, traders do not have to hedge their position to avoid the risk of holding the cryptocurrency. 

Bybit Fees

For Futures trading, the underlying fee varies for both makers and takers.

Other applicable fees included the following:

Trading Fees:

The trading fee is negative (-0.025%) for liquidity providers/makers (order enters the order book and increases market depth). In other words, traders receive trading fees as a rebate from the platform.

The trading fee is positive (0.075%) for liquidity consumers/takers (order executed immediately and reduces market depth). In other words, traders pay trading fees to the platform.

Bybit Safety

Bybit uses the Insurance Fund to decrease the possibility of Auto-Deleveraging: In the event of Liquidation, if the liquidated order is closed at a price worse than bankrupt price, Bybit will use the balance of the Insurance Fund to cover the gap. If the Insurance Fund is insufficient, Auto-Deleveraging will be triggered.

Conclusion

Bybit is the only derivatives platform that is able to offer leverage up to x100 on, BTC, ETH, XRP and EOS.

Users can use it to speculate on short-term price or long term movements or help reduce risk exposure in underlying assets with the options to also hedge their position.