Key Takeaways: What Is Bybit?
- Bybit is not a platform designed around spot trading. Its main function is derivatives trading, a more advanced form of investment that amplifies both profits and losses.
- Traders in several countries — including the United States, United Kingdom and Canada — cannot access Bybit.
- Though it only allows spot trading with a few currencies, Bybit offers a vast range of trading and earning products, including perpetual contracts, liquidity mining and dual asset trading.
Writing a Bybit review can be tricky, as this cryptocurrency exchange claims to do everything. On the one hand, it’s the “crypto ark” where you can safely stash your assets to ride out storms like the 2022 crypto exchange crash. On the other, it hosts trading competitions like the World Series of Trading, where contestants battle to make the most profit before the finish line.
It may seem contradictory, but in the topsy-turvy world of crypto, it’s not unusual to find exchanges like Bybit trying to be everything at once. Here’s what we can say for sure: Bybit was founded in 2018 in Singapore and is now headquartered in Dubai. It cannot operate in the United States or United Kingdom, and it is on thin ice in several other countries.
With that said, being unlicensed in the U.S. doesn’t always mean a crypto exchange isn’t worth your time. KuCoin also lacks a U.S. license, but it remains one of the best trading platforms for discovering obscure coins (learn more in our KuCoin review). Bybit’s unique focus on derivatives over spot trading may make it attractive despite any inconvenience.
Today, we’ll explore the many faces of the Bybit exchange to determine whether it’s worth your time. We’ll consider the perspectives of new investors and experienced traders, look at the range of coins and products available, and examine Bybit’s history. By the end, you’ll have enough information to decide whether to invest or take your business elsewhere.
Before we start, our usual disclaimer. Cryptocurrency is a volatile asset class by nature, and steep price plunges are just as likely as rapid rises. When you trade crypto, always have an exit strategy, and never invest more than you can afford to lose.
Bybit Review: Pros & Cons
- Easy access to futures
- Easy access to perpetual contracts & options
- Range of passive earnings
- Deposit & hold fiat currency
- Strong security record
- Not available in U.S. & other places
- Only 4 spot trading coins
- Very few beginners resources
Bybit Overview & Background
The Bybit exchange was launched in 2018 by former international currency broker Ben Zhou, who still owns Bybit and serves as CEO. At first, it was located in Singapore and Hong Kong, but now its headquarters are in the United Arab Emirates and its official incorporation is in the British Virgin Islands.
Bybit uses several tactics to differentiate itself from the crowded field of cryptocurrency exchanges. The most important distinction is that Bybit is primarily a derivatives exchange. It’s possible to conduct simple trades, but the whole app is bent toward margin and futures trading at higher leverage — with the higher potential profits and amplified risks that go with it.
You can buy futures contracts (with a prescribed settlement date) and perpetual contracts (which can be held indefinitely). Both can grow massively, but you can also lose much more than your initial investment.
If you don’t know what you’re doing or have a plan to absorb losses, we strongly urge you not to trade derivatives on the Bybit exchange.
Reliability is another key asset. Bybit promises to handle 100 trades per second (TPS), 24 hours a day with no downtime. Security has so far held to the “crypto ark” promise, as Bybit is one of the few exchanges to have never been hacked (our Kraken review discusses another).
Can U.S. Citizens Use Bybit?
Technically, it’s not illegal for an American to conduct leverage trading on Bybit. This used to mean you could get around its restrictions by using a good virtual private network (VPN) to get an IP address from a non-restricted country. However, in May 2023, Bybit changed its policy to require know-your-customer (KYC) protocols for all new and existing Bybit users.
Now, you need to complete level-1 verification to do more than withdraw from your crypto wallet. This requires a selfie and a government-issued ID for the Bybit team to review. This ID cannot be from a restricted region, so U.S. users of the Bybit app are now out of luck.
However, since Bybit has implemented KYC, it’s possible the Securities and Exchange Commission (SEC) will grant it a U.S. license. This is because the SEC only allows individual investors to trade derivatives on platforms with strong controls, including KYC. Though, with the American regulatory environment still quite hostile to crypto, there’s no guarantee.
The U.S. isn’t the only country where Bybit access is restricted — and many of them are limited due to the exchange’s own decisions. Bybit exited the U.K. in 2021 and announced plans to leave Canada in 2023. Thanks to a recent crackdown, Japan may be next. It’s also banned in some countries through no fault of its own, including China, Russia, Iran and North Korea.
Bybit is not primarily a spot trading interface. You can only buy 27 coins outright, a far cry from almost all other exchanges. There are almost 400 supported trading pairs (many involving Bitcoin), so you can use most cryptocurrencies to buy these assets. However, you can’t reliably convert in the opposite direction.
For derivatives, the picture is a lot more interesting. Bybit offers just over 250 contracts, split among perpetual contracts, inverse perpetual contracts, futures contracts and options (more on these in “Bybit Derivatives” below). As we wrote this, these were the top 10 by 24-hour trading volume:
- BTC/USD (USDT perpetual)
- ETH/USDT (USDT perpetual)
- BTC/USD (inverse perpetual)
- LINA/USDT (USDT perpetual)
- PEPE/USDT (USDT perpetual)
- BNB/USDT (USDT perpetual)
- XRP/USDT (USDT perpetual)
- SOL/USDT (USDT perpetual)
- MATIC/USDT (USDT perpetual)
- SUI/USDT (USDT perpetual)
Bybit’s derivatives market spans a wide range of blockchain use cases, including metaverse coins, NFTs, Ethereum staking and decentralized finance (DeFi).
Bybit offers four broad types of derivatives. A futures contract, which you may be familiar with from non-crypto trading, is a binding agreement to buy or sell an asset at a fixed price on a future date. Traders try to go long by predicting a price increase, so they can buy cheaper than everyone else, or short by predicting a decrease so they can sell higher than everyone else.
A perpetual contract is a futures contract that never expires. In theory, you can hold it indefinitely without selling it, as long as you can pay the funding fees (see “Bybit Funding Fees”). Perpetual contracts aren’t immune to risk — you can lose a lot of money in funding fees if the asset price drops significantly.
Futures contracts are typically fulfilled in fiat currency, but Bybit also offers inverse perpetual contracts, which instead stipulate a cryptocurrency for the final purchase. These are helpful if you want your derivatives to increase your exposure to BTC or another cryptocurrency.
Finally, you can purchase USDC options. Like futures contracts, options contracts have an expiration date, but the holder isn’t obligated to fulfill the contract once it matures. As the name suggests, USDC is the fulfillment currency for all Bybit’s available options.
Trading Fees & Rates
The fees you’ll pay to use Bybit depend on three factors: which products you’re trading, your VIP level and whether you’re a maker or a taker. The fees are in line with the industry average, very close to other cryptocurrency exchanges like Crypto.com (see our Crypto.com review). Find the full breakdown of Bybit trading fees in the screenshot below.
We’ll start by explaining the maker/taker distinction, since it impacts everything else on the chart. “Makers” are traders who place limit orders, which raise the exchange’s trading volume while they wait to be fulfilled. “Takers” are traders who place market orders, which are fulfilled immediately and detract from Bybit’s market depth.
The three products with distinct trading fee levels are spot trading, contract trading and USDC option trading. Spot traders pay the most, starting at 0.1% for both makers and takers. Contracts start at a 0.06% taker fee and a 0.01% fee for makers. USDC options start out costing 0.03% for everyone.
The Bybit VIP program rewards investors who trade more than $250,000 per month or hold that much in their trading account. Those who qualify unlock better fees. For example, at VIP level 1, contract fees drop to 0.05% for takers and 0.006% for makers. Once your trading volume is over $500 million, maker trades are free.
As is typical for crypto exchanges, Bybit does not charge deposit fees. However, it does charge withdrawal fees that depend on the blockchain being used. The Bybit withdrawal fee is on the dropdown menu when you choose a chain to make the withdrawal.
Bybit Funding Fees
Traders who hold perpetual contracts on Bybit must pay funding fees to maintain their positions. Since perpetual contracts never expire, funding fees act as a price control to make sure their prices never drift too far from the asset’s index price.
If perpetual contracts cost more than the index price, those who hold long positions (i.e. who bet the price will rise) pay those who hold short positions (i.e. who bet the price will fall). If perpetual contracts cost less than the index price, short investors pay long investors.
Using Bybit is no longer as simple as it was before it implemented KYC verification, but it’s still relatively easy to use. However, it is designed and built to reward experienced traders with advanced trading strategies. If Gemini is a little too user-friendly (see our Gemini review), Bybit is the exact opposite.
Bybit was formerly one of the only crypto exchanges that gave you full access without requiring an extensive verification. You don’t even need to add two-factor authentication, though we recommend you do.
However, times have changed. Now, entering an email address, password and security code is only enough to get you Basic access. All you can do at this level is withdraw money and download the Bybit mobile app.
To complete level 1 verification, provide a photo of yourself and a government-issued ID (and the country that issued it). It’ll take about an hour to verify and unlock most of Bybit’s perks. Getting to level 2, which requires proof of address, raises your limits for fiat deposit and crypto withdrawal and lets you apply for a Bybit card.
Crypto Trading on ByBit
At first, Bybit looks very similar to most other crypto exchange interfaces. There’s a one-click interface for simple spot purchases, another tab for peer-to-peer (P2P) trading and a panel for converting one crypto to another (which is free). You can also deposit fiat currency and hold it without buying crypto immediately, a feature we always like to see.
You have to dig a little deeper to notice just how much of the Bybit platform is built around derivatives and leveraged trading. The first sign is an almost unique touch — simple, beginner-friendly interfaces for margin trading and leveraged tokens. This offers easier access to high-risk, high-reward trading than you’ll find anywhere else.
You’ll also find that your leveraged positions are protected by the Bybit insurance fund. This theoretically means that you can’t ever lose more than your initial margin. If the market price falls below your liquidation price, it sells everything and you lose nothing. Naturally, this insurance is funded from your trading, so whether it’s worth the cost is up to you.
Derivative Trading Interface
From there, you can view the full range of derivatives trading pairs by heading to the derivatives portal. All four of Bybit’s main derivative products trade on the same interface. Just click the menu at the top-left, select the tab for your derivative of choice and click to see all the available data.
The trading interface isn’t as dense with information as some alternatives, but it does come with a full menu of indicators and a continually updating order book. This allows active traders to do their own market analysis and (hopefully) make a profit on their crypto assets.
It includes a time-weighted average price (TWAP) tool so you can schedule long-term orders at more accurate pricing. It also has copy trading, which lets you automatically make the same trades as successful investors.
Other tools include an on-site interface for trading bots — no need to go through an API with third parties. You can build a trading bot with a few parameters and have it manage an investment on autopilot (unless it runs out of money).
Bybit also offers crypto loans, for which you can use other crypto in your wallet as collateral. The main purpose of these is margin trading, but you can also use the money for staking or even withdraw it to another wallet. There’s even a Bybit MasterCard that debits your crypto wallet, accepted almost everywhere MasterCard is valid.
Staking on Bybit
Bybit groups staking and other passive earning products under the umbrella of Bybit Earn. Bybit Savings is the “steady” option, in which you stake an amount of a coin you earn in exchange for interest. Yields range from 1.8% on BTC to an alleged 18% on MEE (the in-game token for the blockchain-based strategy game Medieval Empires).
Bigger risk-takers can opt for liquidity mining, which is a passive income stream like staking. However, instead of using their coins to earn rewards from a blockchain, holders use their crypto to provide liquidity for an exchange. It’s not as lucrative as it was a year or two ago, but some investors still like to support an exchange’s community.
Dual asset trading is a way to hedge your bets against potential losses. Traders set a target price for a certain coin, then lock up the money so that price either buys more than it could have (if higher than the real price) or sells for more than it would have (if lower than the real price). It’s low-risk, but it locks in your purchase money for longer than you may like.
You can stake ETH for the new stETH token introduced with Ethereum 2.0, which earns a daily yield (an average of about 4% per year). Finally, there’s Launchpool, where Bybit incentivizes newly launched tokens by offering staking rewards.
Bybit’s help center has a decent number of articles, which are well-organized at the highest level. However, when we dipped into the basics, starting with the “Platform Walkthrough,” we found that the knowledgebase breaks down pretty quickly. Many articles are poorly edited, confusingly titled and aimed more at experts than the beginners who need them.
There is a “Bybit Learn” section explicitly for education, but it largely has the same problems. This isn’t uncommon in crypto or the larger SaaS world, but both crypto and derivatives trading are notoriously difficult topics to understand (we wrote a whole Crypto for Dummies guide for that reason). When combined, they’re likely to frighten most newcomers away.
Another option for getting in touch includes live chat, which is convenient, though you have to do a lot of work to get past the bot to a live agent. If your problem isn’t urgent, you can submit a support ticket. Go to “contact us” at the bottom of the page, fill out all the fields and dropdown menus and submit. It takes about a day to get a reply.
One of our guiding questions when reviewing the Bybit trading platform was whether it’s worth the effort to use if you live in one of its banned territories. Do any of its features justify the need to get around KYC protections and connect to a VPN every time you want to trade?
In this case, our answer is a qualified “yes.” This crypto derivatives trading platform puts futures, options and perpetual contracts front and center in a way few of its rivals can match, giving you more ways to earn money than almost any other exchange. They may not all be advisable to actually use, but crypto investors should be free to decide that for themselves.
However, if you found this review because you’re looking for an exchange to get started with cryptocurrency, we urge you to look somewhere else. Bybit is not for beginners. If you assume it’s a typical spot trading exchange, you stand to lose a lot more than your initial investment. Only use this exchange if you already know what you’re doing.
What’s your opinion on Bybit? Is it your favorite cryptocurrency derivatives exchange, or do you like another one better? Let us know in the comments, and thanks for reading.
FAQ: Bybit Review 2024
Bybit is a cryptocurrency exchange based in Dubai. It emphasizes trading in derivatives, such as futures and perpetual contracts, over spot trading.
No, Bybit is headquartered in the United Arab Emirates. Its founder, Ben Zhou, lived and worked in China for several years, but the exchange has no Chinese ownership.
Bybit is not licensed in the United States. American traders could formerly access it using a VPN, but this is no longer possible as Bybit now requires KYC and a government ID.
Bybit has one of the best safety records of any cryptocurrency exchange, having never suffered a serious hack or breach.