Bybit is a Singapore-based bitcoin derivatives platform which has emerged as the number one alternative to Bitmex. Bybit is very similar to the market’s largest futures exchange – and we will outline the similarities in a platform analysis below – but with some notable differences. Whether you decide to try out bybit instead of bitmex is how important those differences are to you:

• Bitby offers a Ethereum perpetual swap contract, with collateral held in Ethereum. Bitmex of course accepts only bitcoin deposits.
• Bitby has truly EXCELLENT support, with almost instant email response and live support chat agents waiting to hear from you in the chat box. They do not have a troll box like bitmex. To be honest, the troll box on bitmex is in large part a cesspool of idiocy, and has stopped really adding anything.
• Bitby offers only perpetual swaps, there are no futures markets.
• Bitby offers bitcoin, ethereum, Ripple, and EOS markets.

Bitby  has grown tremendously since launch mid-2018, and is now is second only to Bitmex in perpetual swap liquidity, with $1 billion + daily btc volume.

Opening an Account

ByBit makes it extremely simple to register and deposit in your account – as a matter of fact, you can get trading within just a few minutes.

Registration requires just an email, a password – don’t forget to use Referral Code ywOW6 (case sensitive) to take advantage of exclusive offers we provide from time to time. Note that Singapore and US traders are not allowed, though the bitcoin/Ethereum only deposit options, combined with email registration, means that only IP is used to determine country.

ByBit offers $10 free in trading capital just for registering, following bybit on twitter, and retweeting their pinned tweet. Deposit 0.2 bitcoin or 6 ether and get another $50 in trading capital free. While the free trading capital cannot itself be withdrawn, any earnings made from trades may be withdrawn as usual.

The Trading Platform

BitBy uses a tradingview for charting and market depth, and trade slip inspired by Bitmex.

The trade slip (upper left) looks quite similar, as does the contract detail methodology, though some of the vernacular is a bit different. For instance, the conditional order – what bitmex calls stop market – holds back an order from being placed until the market hits a particular trigger.

One nice feature is the auto-replenish option. If enabled, additional margin will be used from your wallet balance to keep your position open, should the mark price hit your liquidation point. 

How ByBit can offer 100X Leverage

Bybit currently offers only the perpetual swap, which is an instrument meant to track the current market value of bitcoin, while allowing for extremely high leverages. Traditionally, very high leverages have been offered only by CFD platforms, in which the platform acts as the market maker and sets the underlying price (an uncomfortable conflict of interest). How can an exchange, in which users set their own buy/sell prices, ensure that their derivative prices remain close to the actual market it is meant to represent? They use what is known as a funding rate, in which long or short positions will pay their counterpart a certain percentage once every eight hours. This percentage is set to push equilibrium towards a representative price, as if the long price is too expensive, the funding rate paid to shorts will encourage the price to move in an appropriate direction.

Leverage, fees, etc

As liquidity is still somewhat low, the initial margin varies depending on the size of the position, which is shown below.

Maintenance margin, the point under which your position will be liquidated, is always set at .5%, regardless of your position size.

The fees are extremely competitive, with maker getting a rebate of .025%, and takers contributing .075%.

Insurance at ByBit

Imagine if the market moves so quickly against your position that it is unable to be properly liquidated, and actually goes into negative. As there is no such thing as a negative balance at bybit, such a situation – and this can happen considering the massive leverages offered, though it is very rare – is managed via an insurance fund and “auto-deleveraging”. A small percentage of the fees collected by ByBit is diverted to the insurance fund, which is used to cover any negatives generated by failure to properly liquidate positions. A running track of the insurance fund is displayed by ByBit, and we can see that, as of Jan 2019, there has been no dipping into the fund.

In the case that a shortfall is larger than the insurance fund reserves, then a process known as auto-deleveraging – aka socialized losses – is used. Basically, traders with the largest profit positions will be closed with part of the profits contributed to support the losses.   

Bottom Line

ByBit has enough liquidity for trading, and is extremely focused on providing a quality experience for new traders. Support is prompt, knowledgeable, and catered to both eastern and western audiences. While the product is based on bitmex, there are some very interesting and important differences, and there is a demographic that will prefer to trade with bybit. Building exchange liquidity is not easy, but it seems that bybit is making a dent.