Bybit Exchange Review: A rival to the market leaders in derivatives?

About

Intro

In another edition of our exchange reviews, we decided to have a look at Bybit, one of the new wave of derivative exchanges launched in 2018.

But, what is the deal with Bybit? What do they offer to users and is it a safe exchange to use? In this review, we will dig deep into this exchange and give you all the answers. We took an in-depth look at the exchange by examining the team, security, fees, platform functionality and asset coverage, among other metrics.

If you wish to skip to the summary to see the SWOT analysis, matrix score and rating, click here.

Finally, if you find this review beneficial and wish to start trading on Bybit, feel free to sign up and register on their website and receive up to a $90 signup bonus! Proof of Review will receive a small referral credit, which will help us to continue providing reviews like these.

Thank you in advance for your support ❤️

Overview

Bybit is a cryptocurrency derivatives exchange established in 2018. According to the website, the founding team is comprised of early blockchain/cryptocurrency adopters, along with legacy finance professionals from the Forex and investment banking industries.

The company is registered in the British Virgin Islands, with the team headquarters based in Singapore, Taiwan and Hong Kong.

 

Use case

What is Bybit?

Bybit is a derivative cryptocurrency trading platform placing an emphasis on its leveraged trading, with up to 100x leverage on their Bitcoin and Ethereum base trading pairs.

What are derivatives?

Derivatives are financial instruments which derive their prices and value by imposing certain conditions on an underlying asset. The most popular derivatives in the crypto world are futures, options, and swaps. Newer exchanges like FTX (link to article here) have been increasingly innovative with derivatives contracts offered, which provide new ways to gain exposure to crypto asset classes while maintaining a lower risk profile.

Recent BitMEX Reseach reports show that the derivatives trading in cryptocurrencies account for more than one-quarter of the total trading volume, an astonishing fact considering the first derivatives products were launched only 5 years ago.

History

How long has Bybit been operating?

As mentioned earlier, the exchange was launched in Dec 2018 and has been operating successfully for over 12 months.

Based on the fact that the operating history of the exchange is more than 12 months, we award 1 mark to Bybit. The exchange has done an outstanding job in this time with uptime during periods of high network traffic and market volatility, which historically has been a problem for other derivatives exchanges (cough cough Bitmex).

Score 

Adoption

How many users are there?

Like most exchanges, there are no public user numbers listed on the website and we were unable to find any public information on user numbers from the project’s blog.

The trading volumes on Bybit are hugely impressive and indicates there is a large pool of users trading on the exchange daily.

Social Sentiment

A quick analysis on Twitter shows plenty of positive sentiment towards Bybit and its platform.

What incentives are there to register?

At the time of writing, a sign-up bonus of $90 is offered for those that open a new account and follow certain tasks. Any bonuses paid cannot be withdrawn and can only be used to pay trading fees. 

The exchange has performed well in terms of generating buzz in the crypto community and drawing in traders onto its platform, as highlighted by the trading volumes. The competitions have also ensured a huge community following, so we award a score of 2 on this metric

Score 

Company Information

Who is the company behind Bybit?

There is no publicly registered company listed on the Bybit website, although the LinkedIn profile shows Bybit Fintech Limited as the registered company based in the British Virgin Islands. There is, however, no company number listed alongside the company name, meaning we are unable to verify the information.

As an exchange holding custody of user funds, we always recommend that exchanges list their public company information on their website where possible. We give the project a bonus point based on it being registered outside of the USA.

Score 

Coin Listings

What coins are listed on the platform?

As a derivatives exchange, Bybit currently has several trading pairs including BTC/USD, ETH/USD, EOS/USD and XRP/USD.

How often are new coins listed?

There are no new coin listings in the last 90 days on the platform, however, this is common among derivative exchanges as liquidity for their trading pairs is crucial. New coins are only listed after a period of research, due diligence and market research, although we could not find any information regarding their listing process.

Does the exchange list any emerging or unique blockchains?

All the pairs listed on the platform are relatively standard, with no emerging blockchains or codebases among the listed pairs.

Score 

Products/Features

What features are available on the platform?

As with all derivatives exchanges, there is leveraged trading available on Bybit. This ranges from 50x on all pairs and 100x on BTC pairs.

Competition

How does Bybit compare with its peers in the market?

📊 Uptime

Bybit stands out among its competitors with its ability to maintain uptime on the platform during the busiest of periods, which is highly impressive and an important factor for algorithmic-based traders trading with larger position size and looking to avoid excessive slippage.

💰 Bonuses

The exchange also is competitive with its bonuses offered to users upon signup. In terms of markets offered on the platform, Bybit could improve its range of available pairs, but this is possible in time.

💲 Fees

In this regard, Bybit does fall behind its competitors with higher taker fees than Bitmex or Binance Futures, but they also provide a rebate on maker fees, incentivising market makers to join the platform if trading elsewhere.

To see full marks in this section, we would like to see some unique innovation from Bybit either on its platform or with its features.

Score 

Team

Experience

Who is the team behind Bybit?

There is no company information listed on the Bybit website and the only team information listed mentions the CEO, Ben Zhou. However, there is a LinkedIn profile and the registered company listed is Bybit Fintech Limited. There are 41 employees listed on the team, which reflects the size of the exchange and a sign of their highly impressive growth since launch.

A quick google search shows the CEO has a public presence and there are several recent public interviews with Mr. Zhou talking about Bybit.

How can Bybit improve transparency?

We recommend that as the custodian of user funds, exchanges list their full team and company information on their website for transparency.

Score 

What is the experience of the Bybit team?

Ben is an economics graduate and prior to launching Bybit was working as the China General Manager for XM for 7 years. XM is an award-winning forex and CFD broker serving clients from 196 countries on 5 continents.

This informs us that Ben is highly experienced and knowledgeable in the financial markets, giving him a solid foundation to start his own exchange.

Score 

Development

Development post-launch is often an indicator of the team focus and capabilities and in this regard, we are impressed with how Bybit have progressed in the last 12 months.

What new developments are there?

There are regular developments and updates for the exchange since launch in 2018, with users updated via all social media channels about changes in the platform or updates. The bulk of the developments since launch are focused around improving security, gaining adoption among users and improving the user experience.

Score 

Advisors partnerships

Studying the documentation on the Bybit website there is no evidence of advisors, partners or crypto fund investors. While this may not be the case privately, there is nothing in the public domain for us to comment on.

Score 0

Funding / Expenditure / Revenue

How was the exchange platform funded?

There is no public information around funding for the exchange prior to launch and there has been no token sale or public fundraising. The exchange is generating self-sustaining revenues from its trading fees and we estimate these to be significant based on the volumes across their markets.

Are the financial records public?

Bybit does not have any public financial records and this is the norm among exchanges in this industry. The company is a privately funded entity and has the right to keep this information private.

We score two out of three for this metric for Bybit. Nearly every exchange we review misses out on the bonus point in this section due to a lack of transparent financial reports.

Score 

Features

API

There is a public API available, free to use and documented in both English and Chinese. This is a nice touch to improve adoption and not seen across many exchanges.

Score 

Order Types

What order types are there on Bybit?

The trading platform allows basic order types such as limit/market orders and advanced order types such as conditional orders as shown below.

Order process

Bybit exchange advanced order system allows traders to set up their take profit and stop loss in one click from the order confirmation window and gives access to multiple order types and time in force. This is an excellent feature as users don’t need to manually enter orders for stop loss and take profit.

What makes trading simple on the Bybit exchange?

The platform’s order system provides greater flexibility and control  with the inclusion of conditional orders. This feature allows users to manage risk by executing orders based on conditions relating to the mark, index, or market price.

Score

Token Utility

There is currently no token associated with the Bybit platform so we are unable to award any score for this metric.

Score 0

Trading Pairs

What trading pairs are available?

Trading pairs are limited to one base pairing (USDT), and four total contracts (BTC, ETH, EOS and XRP). In this regard it does fall behind its competitors, and this is an area for improvement for the platform.

While maintaining a single base pair allows for ease of use and simplified experience for traders newer to derivatives, it presents clear limitations. Adding another base pair would be a welcome change and improvement.

As with many derivatives exchanges, the success of Bybit’s contracts is measured in liquidity, volume, and reliability. New listings require significant liquidity to function effectively, and therefore additions are more sporadic.

Score 

Trading Fees

Bybit offers a competitive fee structure across its trading pairs, with a volume-based tier of Maker and Taker fees shown below.

What are the trading fees?

Standard taker fees are 0.075% and below and makers receive a rebate fee of 0.025%, as shown below. There does not seem to be any tiered fee discounts for users based on the volume traded.

How do these compare with its rivals?

Bybit fees are substantially lower rates than the industry average fee of 0.2%, but they are higher than both the standard taker fees of 0.07% at Bitmex and 0.04% at Binance. There is also no sliding fee scale based on volumes traded.

In this regard, there is room for improvement for Bybit to become more competitive.

Score 

Security

Overview

We take a look at the security metrics for Bybit. Although we aim to cover a range of metrics, no cryptocurrency exchange is 100% secure and users are encouraged to only store funds on exchanges when trading.

Is the website secure?

We run all the exchange websites through Mozilla’s Observatory-test. The score in this test is one of many indicators of the exchange’s security.

ByBit received a score of F in this test. Upon reviewing their previous results, we can see they have fluctuated between D, B and more recently scoring F twice in the most recent tests. We would recommend the Bybit team spend some time as a priority addressing this and bringing the score back up to B or above.

SSL

As with any exchange website, users should always verify the SSL certificate on the site before registering. We can see that Bybit has a full SSL certificate issued by GeoTrust.

Whitelisting

There is a whitelisting process available for users on Bybit, with the user unable to change their registration email following signup. We personally like this feature, as it should reduce a hacker’s ability to compromise a user’s exchange account without being detected.

Other security features

Another one of the excellent security features is that users are alerted anytime they sign in, meaning users can be made aware immediately in case the account is compromised. The user dashboard also indicates the login information listing device, location and login time, again allowing users to keep an eye on suspicious logins.

We would also recommend the ability to whitelist user IP addresses and withdrawal addresses to further secure user accounts.

Score 

2FA

There is 2FA available on the exchange, however, it is not mandatory for users to set this up to log in or trade on the platform. The 2FA options available are email, SMS and Google Authenticator, which provides a broad range of options at different levels of security and convenience, depending on the preference of the user.

We recommend that Bybit make 2FA registration mandatory when users first register their account, and this should be standard across the industry.

Score 

Safety

Bybit pride themselves as being a secure exchange with no history of theft, hacks, or data leaks.. A quick google search shows no recorded incidents of theft or hacks on the exchange.

The withdrawal process is usually a good reflection of an exchange’s security protocols and methodology as a whole.

When withdrawing from Bybit, verification involves entering a code sent to the registered email address for the account, as well as entering their 2FA code. The final step before the withdrawal goes through is to confirm on the link sent by email to the user. The withdrawal will not be initiated until this final step is completed. 

This is a nice, secure process and also allows users to double check any funds sent in error before processing.

We cannot find any emergency lock feature on the user’s account or sent via email in the case of an account being compromised. We recommend this as a feature on all exchanges to protect users. 

There also seems to be no dedicated security channel for the support options offered. We recommend all exchanges have a dedicated channel for security available to users 24/7, as it is the most critical element of customer support that they provide.

Score 

Audit

We cannot find any record of a public security audit of the Bybit exchange, which is not uncommon for exchanges. 

We always recommend that all exchanges inform their users that the exchange has been audited by a third party, along with the frequency of any audits. We award one mark in this section as there is no record of any compromises on the exchange.

Score 

Fund Custody

How are user funds stored on the exchange?

The website states that the majority of assets stored on Bybit are managed in multi-sig cold wallets only. This means in theory that even in the event of a system compromise, an attacker still will not have full access to all the required keys to steal funds.

Cold storage should be mandatory among exchanges. If your exchange does not follow these practices, it is a recipe for disaster.

Are withdrawals audited?

The website also states “ByBit withdrawals require a multi-signature process. If the public keys do not match, the system is immediately shut down and trading is stopped”.

While offline withdrawals can be a slower process, the ByBit team puts security above all else and still allows withdrawals three times a day. We see this as a positive, as it indicates that withdrawals are audited prior to release.

Is there a security guide for users?

There is a section on the website dedicated to security, with the information given to users on how to securely send or store funds. We look at Binance as the benchmark for this with its security guides and recommend other exchanges provide a similar guide to ensure their users remain safe.

Is there any guide in case of exchange hack and/or procedures in place should this occur?

We also recommend that Bybit provide a user guide to highlight their plans in case users are unable to log in or the exchange is compromised. We have never come across an exchange which tells its users what the procedures are in case of a hack.

Do users maintain custody of their funds or private keys?

Since Bybit is a centralised exchange, users do not control their private keys and as such, all funds deposited on the exchange are in the custody of Bybit until withdrawn. We always recommend users only keep funds on centralised exchanges when trading and withdraw funds as soon as practical for their own safety and security.

Score

Legal

Overview

We take a look at the legal metrics for the exchange, however, we remind all users to undertake their own due diligence before registering, depositing and trading at any exchange. Users have little or no legal recourse in the event funds are lost on exchanges through hacks or mismanagement.

KYC

Do I have to register for KYC?

One of the main features highlighted by Bybit is their no KYC policy, stating that users are able to trade on the exchange without any verification required when depositing, trading or withdrawing funds.

Users are reminded that no KYC exchanges still have their restrictions, as users can potentially be liable to prove their source of funds at any time, negating any no KYC policy.

Is there any legal team or compliance policy?

We could not find any details of any compliance policy or compliance officer on the team.  We recommend that all exchanges give an outline of their compliance policy prior to a user depositing funds into the account, along with the contact details of the compliance officer available on the website or LinkedIn profile.

Is Bybit a regulated exchange?

Bybit is not a regulated exchange, so users are reminded to proceed with caution when trading on such exchanges.

We award a score of 1 for this metric based on the fact that non-KYC exchanges have their appeal amongst a certain crowd of traders, mainly those from restricted countries such as the US.

Our concern for users using a non-KYC exchange is that they may fall foul of the terms and conditions and if they are a user from a restricted country they are liable to account termination or even possible loss of funds.

Score

Volumes

What are the daily volumes like on the exchange?

Considering the platform is just over 1 year old, the daily trading volumes are impressive with the BTC/USDT pair averaging a daily volume of 65,000 BTC when we analysed the platform for this review

Are the trading volumes verified?

There is no information available to verify the trading volumes listed on Bybit. We encourage exchanges to register with metrics sites such as Nomics so trading volumes can be independently verified.

We are awarding a score of 1 in this metric, only because the Bybit trading data is not verified on our reference sites over at FTX and Nomics. Aside from that, the trading volume of over $500 million USD on its main pair is highly impressive and a reflection of the excellent progression Bybit has made since launch.

Score

User Restrictions

Who can use Bybit?

Naturally, being a futures and derivatives exchange means there are restrictions on users from the United States, Canada, China, and the usual suspects Iran, North Korea, Syria and Cuba as per the policy listed on their website.

How is this enforced?

Users are blocked by geofencing from accessing the site, however, this can be circumnavigated by VPN use. The Terms and Conditions state that users from the above countries will have their account terminated if they are found to be breaking user restrictions.

In this case, restrictions on users from the above countries are positive, especially from the US, meaning that Bybit is not liable to US financial regulations.

Score

Accounting

Users are able to download trade history as a CSV file for all trade history for the duration of the account. We see this as beneficial for users, as are they are able to use this information for accounting and tax reporting purposes.

Score

SAFU

Is there any insurance fund?

There is a listed insurance fund on the website, where Bybit uses the Insurance Fund to take over users’ unfilled positions before they are taken over by the Auto-Deleveraging System.

The Insurance Fund comes from liquidations executed with a price better than the bankruptcy price of that position.

Insurance fund info

The size and growth of the insurance fund shown below highlight the trading volumes on the exchange and also the strong health of the exchanges ability to manage any abnormal liquidations that may arise.

Are my funds on the exchange insured?

As with many derivative cryptocurrency exchanges, Bybit is registered outside of the United States and not classed as a regulated exchange. It is likely that funds on the exchange are uninsured as a result. 

Does Bybit have a Secure Asset Fund for Users?

There is not currently a Secure Asset Fund for Users (SAFU) listed for Bybit outside of its insurance fund. We recommend exchanges list if they have a SAFU in case of exchange hacks/loss of customer funds.

Score

Community

Overview

We take a look at the community engagement for the exchange, often one of the most overlooked criteria when deciding on whether to use an exchange or not. Customer support is essential to users, along with regular communication on developments.

Communication

There are various methods of communication for the exchange, with the team clearly acknowledging the importance of communication and engagement with its community.

What are the most active channels?

The majority of communication occurs in the Telegram channel, which is recommended as it allows 2-way communication. The official twitter account is highly active, often tweeting on a daily basis.

There is also a YouTube channel with various videos on there but no official user guides. We highly recommend that Bybit make official video user guides on how to use the exchange as a form of virtual customer support.

Score ✅✅✅

Engagement

How well does Bybit engage with its community?

According to RivalIQ, the average Twitter engagement on the Bybit account is 94.1 per tweet, which is 0.17% of its total 52k follower audience.

At a rate of 94.1 engagement total per tweet, this is more than 13 times the average engagement rate across all industries. The engagement rate per tweet is 0.18% or more than 3 times the industry average.

Bybit has excellent engagement with their community with clear dedicated social media content creators engaging its huge following of 52,000 followers. They are taking this one step further by introducing the competition for community-created content and rewarding winners with various prizes.

Score ✅✅✅

Website

The website is very easy to navigate, with a crisp design and a nice interface. It provides highly detailed information about Bybit, along with their products. As mentioned previously, one notable area for improvement would be providing a little more information about the team for transparency. Currently, the only information is provided for the CEO, Ben Zhou.

Is the website compliant?

The website is secured via HTTPS, however, it is not GDPR compliant and the domain details are not public.

Is the website multilingual?

The website and platform are multilingual in several languages including English, Mandarin, Korean, Japanese and Russian.

Score ✅✅✅

Support

What channels of user support are there?

There are several options for user support with a Live Chat and email available for users.

Is there multilingual support?

The team has advised that multilingual support is available, however, there is no information offered on which languages are supported.

We think it’s a nice touch that emails for different teams are provided. We can also recommend a dedicated security email address provided for users with immediate and urgent security support requests.

Two areas for improvement would be to make clear in which languages support can be provided to users, and an enhanced focus on user security support, which has popped up a few times (dedicated team/contact info, ability to quickly lock account if unauthorized access suspected, etc.)

Score ✅✅✅

Trading Experience

Overview

We take a look at the trading experience for the exchange, however, we remind all users to undertake their own due diligence before registering, depositing and trading at any exchange. Users have little or no legal recourse in the event that funds are lost on exchanges through mismanagement and/or negligence.

Creating a Bybit Account

Getting set up with a Bybit account is really easy and takes just a few minutes. Bybit doesn’t require any KYC verification, so it’s a relatively simple signup process.

Bybit Sign Up

To register for a Bybit account, head over to the registration page here

Bybit provides two ways in which you can register for an account: via email, or phone number. When registering for an exchange, we always recommend using a dedicated email address and 2FA device, along with a unique password.

Select which one you want to use to sign up, enter your details and click the Register button.

Summary

Conclusion

Overall, the exchange has had an impressive start from its launch in 2018 and with a few improvements over time, it is possible to see the exchange cement its place in the top tier of crypto derivatives exchanges.