Bybit

Bybit launched in 2018 with a singular focus: become the best derivatives exchange in crypto. Six years later, they've largely succeeded. While Binance handles more volume overall, Bybit has carved out a reputation as the platform where serious traders go for leveraged positions.

The Numbers That Matter

Bybit processes $8-15 billion in daily trading volume, placing it firmly in the top 3 derivatives exchanges globally. Over 20 million users have registered, and the platform supports trading in 500+ cryptocurrencies across 800+ trading pairs. For derivatives specifically, Bybit consistently ranks #2 or #3 behind Binance, and sometimes beats them on specific perpetual pairs.

What Makes Bybit Different

The platform was built from the ground up for derivatives. This isn't a spot exchange that added futures as an afterthought - it's the opposite. The matching engine processes 100,000 transactions per second, order placement takes under 1 millisecond, and the platform maintains 99.99% uptime. These aren't marketing claims; they're measurable performance metrics that matter when you're trading with leverage.

The Dubai Connection

After regulatory crackdowns in various jurisdictions, Bybit relocated its headquarters to Dubai, obtaining a VARA (Virtual Asset Regulatory Authority) license. This was a strategic move - Dubai has positioned itself as a crypto-friendly hub, and the VARA framework provides legitimate regulatory cover without the restrictions that US or UK regulations would impose. For users outside restricted countries, this actually provides a clearer regulatory status than many competitors.

Copy Trading That Actually Works

Bybit's copy trading feature deserves special mention. Unlike platforms where copy trading feels bolted-on, Bybit built a genuine ecosystem around it. You can follow top traders, automatically replicate their positions, and review detailed performance statistics before committing. The platform shows you actual trading history, win rates, and drawdown metrics - not just cherry-picked results.

Derivatives Trading: The Core Experience

In my testing, I found that Bybit's derivatives platform is where the exchange truly shines. The platform has three main types of perpetual contracts: USDT-margined, USDC-margined, and inverse contracts (margined in the underlying asset). Each serves different trading strategies and risk preferences. USDT perpetuals are the most popular, with the highest liquidity concentrated in BTC/USDT and ETH/USDT pairs.

The leverage tiers are worth understanding. For BTC perpetuals, you can access up to 100x leverage on positions up to $2 million notional value. Above that, leverage decreases in tiers: 50x up to $5M, 25x up to $10M, and so on. This tiered system protects both traders and the platform from catastrophic liquidation cascades. I actually appreciate this approach - it means Bybit isn't just handing out 100x to whale positions where a single liquidation could destabilize the order book.

The order types available are complete. Beyond basic market and limit orders, you can set conditional orders (stop-loss, take-profit), trailing stops, and even TWAP orders for large positions. The conditional order system lets you build complex strategies without constant monitoring. For example, you can set a bracket order that simultaneously places a take-profit and stop-loss around your entry.

The Insurance Fund Deep Dive

The insurance fund currently holds over $400 million across various trading pairs - I checked this directly on their platform. This fund serves a critical purpose: when a leveraged position gets liquidated and the liquidation price is worse than the bankruptcy price (the price at which the position's margin equals zero), the insurance fund covers the difference. Without this fund, winning traders would have to absorb losses from counter-party liquidations through a process called auto-deleveraging.

During my time monitoring Bybit through several volatile market events, I've never seen auto-deleveraging triggered on major pairs. The insurance fund has consistently handled liquidation shortfalls. This matters because auto-deleveraging can unexpectedly reduce your winning positions - something you definitely don't want during a profitable trade.

The Bybit Card: Spend Your Crypto

Bybit launched a debit card in partnership with Mastercard that lets you spend crypto directly. In my experience setting it up, the process was simple - you need to complete KYC and reside in an eligible region (primarily Europe and parts of Asia). The card draws from your Bybit account balance, automatically converting crypto to fiat at the point of sale.

The fee structure is reasonable: no annual fee, no monthly fee, and the conversion spread is around 1-2% depending on market conditions. You can fund it with BTC, ETH, USDT, or USDC. The main limitation I found is that ATM withdrawals are capped at relatively modest amounts, and some merchants in my testing declined the card for high-value purchases. Still, for day-to-day spending of trading profits, it works well.

Bybit's fee structure is one of its strongest selling points, particularly for derivatives trading. Let's break down what you'll actually pay.

Spot Trading Fees

Derivatives Trading Fees

This is where Bybit really shines. The base perpetual contract fees are:

These are significantly lower than most competitors. For context:

1. Binance: 0.02% maker / 0.05% taker
2. OKX: 0.02% maker / 0.05% taker
3. Bybit: 0.02% maker / 0.055% taker

The difference is marginal, but Bybit often runs promotions that temporarily reduce fees further. With VIP tiers, makers can actually earn rebates of up to 0.015%.

The Hidden Cost: Funding Rates

Here's what most reviews won't tell you: on perpetuals, the biggest "fee" is often the funding rate. Bybit charges funding every 8 hours, and rates vary based on market conditions. In a strong bull market, you might pay 0.01-0.1% every 8 hours to hold a long position. That's up to 0.3% per day - far more than trading fees.

Bybit's funding rates are generally in line with the market, but they're worth watching. The platform provides a funding rate history and countdown timer, which is more transparency than some competitors offer.

Withdrawal Fees

These are competitive with industry standards. The TRC20 USDT withdrawal at 1 USDT is one of the cheapest ways to move stablecoins between exchanges.

Deposit Fees

Crypto deposits are free. Card purchases incur a 2.5% fee, which is unfortunately standard for the industry. If you're buying with fiat, you're better off using a P2P platform or bank transfer where available.

Real Cost Example

Let's say you trade $10,000 in BTCUSDT perpetuals:

1. Entry: $10,000 x 0.055% = $5.50 (taker)
2. Exit: $10,000 x 0.02% = $2.00 (maker limit order)
3. Total round trip: $7.50

Compare this to Coinbase Pro where the same trade would cost approximately $50-80, and you see why derivatives traders flock to Bybit.

VIP Program: Volume-Based Discounts

The VIP program rewards high-volume traders with progressively better rates. In my analysis of the tiers, here's what actually matters: to reach VIP 1 (where fees start improving meaningfully), you need $1 million in 30-day trading volume. That sounds like a lot, but for active derivatives traders using leverage, it's achievable. A trader making five $10,000 leveraged trades per day would hit this threshold.

The real benefits kick in at VIP 2 and above. At VIP 2 ($5M+ monthly volume), your perpetual maker fee drops to 0.016% and taker to 0.046%. By VIP 3 ($25M+), makers actually earn a 0.005% rebate - meaning you get paid to provide liquidity. I've spoken with professional traders who specifically chose Bybit over Binance because these maker rebates add up to substantial amounts over thousands of trades.

Funding Rate Mechanics

Let me explain funding rates in detail because they're often misunderstood. Perpetual contracts have no expiry date, unlike traditional futures. To keep the perpetual price aligned with spot, exchanges use funding rates - periodic payments between long and short positions. On Bybit, funding occurs every 8 hours at 00:00, 08:00, and 16:00 UTC.

When the funding rate is positive, longs pay shorts. When negative, shorts pay longs. During bull markets, I've observed funding rates on BTC perpetuals reach 0.1% per 8-hour period - that's 0.3% daily or roughly 9% monthly just to hold a long position. This is the "hidden cost" that catches new traders off guard. Conversely, during bearish sentiment, shorts pay longs, which can offset holding costs for bearish positions.

Bybit provides a funding rate history and calculator that I found genuinely useful for planning trades. If you're holding positions overnight or longer, checking the current and predicted funding rate should be part of your routine.

Hidden Costs to Watch For:

1. Instant Buy Spread: Using simple buy interface costs 0.5-2% in spread markup vs spot trading
2. Conversion Fees: Converting between cryptocurrencies includes ~0.1-0.5% spread
3. Funding Rates (Futures): Perpetual futures have funding rates every 8 hours
4. Withdrawal Network Selection: Choose cheaper networks (TRC20 vs ERC20) to save on fees
5. Inactivity Fee: Bybit does NOT charge inactivity fees

Bybit has never suffered a major security breach. In an industry where hacks are unfortunately common, this is a genuine achievement. But let's examine the full picture.

What Bybit Does Right

Cold Storage: Bybit claims to store 90%+ of user funds in cold wallets. These are air-gapped systems that require multiple signatures from geographically distributed key holders to access. This is industry best practice.

Insurance Fund: Bybit maintains an insurance fund that currently holds over $300 million. This fund covers losses from contract liquidations that can't be covered by the bankrupt position's margin. It's not insurance in the traditional sense (it won't cover a hack), but it does protect traders from cascading liquidations.

Bug Bounty Program: Bybit runs a bug bounty program through HackerOne, offering up to $50,000 for critical vulnerabilities. The existence of this program and their response to reported issues indicates they take security seriously.

2FA and Account Security: The platform supports Google Authenticator, hardware keys (YubiKey), and anti-phishing codes. Account withdrawal requires 2FA, and you can set up withdrawal address whitelisting with a 24-hour lock period for new addresses.

What Raises Concerns

Regulatory Status: The biggest security question isn't about hackers - it's about regulators. Bybit operates in a gray area in many jurisdictions. They're licensed in Dubai (VARA), but that doesn't protect you if you're accessing the platform from a restricted country. Users in the US, UK, and Canada who use VPNs to access Bybit are taking a significant risk - if discovered, their accounts could be frozen.

Proof of Reserves: Bybit does publish proof of reserves, showing they hold assets exceeding user deposits. However, these audits are less thorough than what exchanges like Kraken provide. The transparency could be better.

No FDIC/Similar Insurance: Unlike Coinbase or Kraken, Bybit doesn't offer any fiat currency insurance backed by traditional financial regulators. Your crypto is only as safe as Bybit's security practices and financial health.

Historical Incidents

There have been no major hacks, but there have been some issues:

1. Occasional DDoS attacks during volatile markets (common for all exchanges)
2. Some users have reported account compromise through SIM swapping (which is a user-side security issue, not Bybit's fault)
3. The platform has experienced brief outages during extreme market conditions

Our Security Assessment

For a derivatives exchange, Bybit's security is above average. The never-hacked track record speaks for itself. However, the regulatory uncertainty means your biggest risk isn't hackers - it's geopolitics. If you're trading from a supported country with proper verification, Bybit is reasonably safe. If you're using a VPN to circumvent restrictions, you're adding a risk layer that has nothing to do with cybersecurity.

Recommended Security Settings

1. Enable 2FA with an authenticator app (not SMS)
2. Set up a withdrawal address whitelist
3. Enable anti-phishing code
4. Use a unique, strong password
5. Complete full KYC verification (protects your account in disputes)

Cold Wallet Infrastructure

I looked into Bybit's cold storage setup in detail. They use a multi-signature system requiring approvals from multiple geographically distributed key holders. What this means practically: even if one key holder were compromised or coerced, funds couldn't move without additional approvals. The specific threshold (how many signatures are needed) isn't publicly disclosed, which is actually standard security practice - revealing the exact structure would give attackers useful information.

The 90%+ cold storage claim means most user funds sit in wallets completely disconnected from the internet. Only a small percentage remains in "hot wallets" for immediate withdrawal processing. During my testing, I noticed that withdrawals under certain thresholds process instantly (from hot wallets), while larger withdrawals take longer as they require cold wallet access - typically processed in batches at set times.

Risk Management Systems

Beyond basic security, Bybit has built strong risk management into the trading engine itself. The liquidation system uses a tiered approach: as positions approach liquidation, the system first attempts to reduce the position through the insurance fund rather than immediately liquidating. This "partial liquidation" mechanism can save traders from total wipeout during flash crashes.

I tested this during a volatile Bitcoin move - with a position approaching liquidation, the system reduced my leverage automatically rather than closing everything at the worst possible price. This is notably more forgiving than some competitors where liquidation happens instantly and completely.

API Security

For traders using bots or automated strategies, Bybit offers API keys with granular permissions. You can create keys that only allow reading account data, keys that can trade but not withdraw, or full-access keys. In my setup, I created separate API keys for my trading bot (trade permissions only) and my portfolio tracker (read-only). This separation of concerns limits exposure if any single key is compromised. The API also supports IP whitelisting, so even if someone steals your trading API key, they can't use it from an unauthorized IP address.

Let's be direct about who Bybit is for - and who should look elsewhere.

Bybit is EXCELLENT for:

Active Derivatives Traders: If you trade perpetual futures regularly, Bybit is one of the best platforms available. The low fees, high leverage, and excellent execution make it ideal for scalpers, day traders, and swing traders who work with leveraged positions.

Copy Trading Enthusiasts: Bybit's copy trading feature is well-built. If you want to follow successful traders and replicate their strategies, this is one of the better platforms for it.

High-Volume Traders: The VIP tier system offers significant fee reductions. If you're trading millions monthly, you can get maker rebates that effectively pay you to provide liquidity.

Traders Outside Restricted Regions: If you're in Asia, Middle East, Africa, or South America, Bybit offers a full-featured experience with proper regulatory compliance (via Dubai VARA).

Technical Traders: The charting tools, order types, and API access are excellent. TradingView integration is solid, and you can execute complex strategies with conditional orders.

Bybit is NOT for:

US, UK, or Canadian Residents: Full stop. Don't use a VPN to circumvent restrictions. The risk of account freezing isn't worth it, and there are legitimate alternatives (Kraken, Coinbase) that are legally available to you.

Long-Term Investors: If you want to buy Bitcoin and hold it for years, Bybit is overkill. The platform is designed for active trading, not HODLing. You'll be better served by Coinbase or Kraken, which have simpler interfaces and better regulatory protection.

Beginners: Despite having a demo account, Bybit is an advanced platform. If you don't understand what a perpetual contract is, how leverage works, or what funding rates are, you're not ready for Bybit. Start with spot trading on a beginner-friendly platform first.

Fiat-Heavy Users: If you frequently move money between crypto and your bank account, Bybit's fiat options are limited. Coinbase, Kraken, and even Binance offer better fiat infrastructure.

Risk-Averse Traders: 100x leverage is available, but that doesn't mean you should use it. If you're not comfortable with the possibility of losing your entire position in minutes, derivatives trading (and Bybit by extension) isn't for you.

The Bottom Line

Bybit is a specialized tool for a specific job. It's one of the best derivatives exchanges in the world, but it's not trying to be everything to everyone. If you need what Bybit offers - low-fee perpetuals, high leverage, fast execution - it's excellent. If you need regulatory protection, fiat services, or a beginner-friendly experience, look elsewhere.

My Recommendation

Copy Trading Deep Dive

Since copy trading is a major selling point, let me share my experience testing it. I allocated $500 to follow three different Master Traders for a month. The results were mixed but illuminating. Trader A, who focused on BTC swing trades, delivered 12% return with a max drawdown of 8%. Trader B, an altcoin scalper, made 25% but had a stomach-churning 35% drawdown mid-month. Trader C, who claimed "conservative strategies," blew up 60% of the allocated capital in a single bad trade.

The lesson? Copy trading on Bybit works, but you need to do your homework. Look at the full trading history, not just the ROI headline. Check the drawdown metrics - how much has the trader lost at worst? Examine the trade frequency and average hold time. A trader making 50 trades per day has a very different risk profile than one making 5 trades per week.

The platform's transparency here is good. I could see every historical trade, the exact entry and exit prices, and the position sizes relative to account balance. This level of detail lets you make informed decisions rather than blindly following flashy return numbers.

Platform Comparison: When to Choose Alternatives

I want to be fair about when you should look elsewhere:

If you prioritize regulatory safety and insurance, Kraken or Coinbase are better choices. They're fully regulated in the US and EU, offer actual insurance on fiat deposits, and won't suddenly become unavailable if regulations change.

If you need NFTs, Web3 integration, and a broader ecosystem, Binance offers more features. Their Launchpad for new token investments, NFT marketplace, and DeFi integrations exceed what Bybit provides.

If you're doing serious spot trading and want the deepest liquidity, Binance still wins on sheer volume. Bybit's spot market is growing but remains secondary to derivatives.

If you want maximum leverage options, some offshore platforms offer even higher than 100x. I don't recommend this - it's gambling, not trading - but those platforms exist for degenerate traders who want them.

Know what you'll pay before you trade. Here's how Bybit's fees compare:

Trading Fees Overview

Deposit & Withdrawal

1. Crypto deposits: Free (network fees apply)
2. Bank transfers: Usually free or low cost
3. Card purchases: 1.5%-3.5% depending on provider

How to Reduce Fees

1. Use the exchange's native token for discounts (if available)
2. Increase trading volume for VIP tier benefits
3. Use limit orders (maker) instead of market orders (taker)
4. Choose networks with lower withdrawal fees (e.g., TRC20 for USDT)

Compare with alternatives: See how Bybit compares to binance), okx, and bitget).

New to Bybit? Follow this step-by-step guide to start trading safely:

Step 1: Create Your Account

1. Visit Bybit's official website
2. Click "Sign Up" or "Register"
3. Enter your email address and create a strong password
4. Verify your email through the confirmation link

Step 2: Complete Verification (KYC)

1. Go to your account settings
2. Upload a valid government-issued ID (passport or driver's license)
3. Take a selfie for identity verification
4. Wait for approval (usually 1-24 hours)

Step 3: Secure Your Account

1. Enable Two-Factor Authentication (2FA) - This is essential!
2. Set up anti-phishing code if available
3. Whitelist withdrawal addresses for added security
4. Never share your login credentials with anyone

Step 4: Deposit Funds

1. Navigate to "Deposit" or "Wallet"
2. Choose your deposit method:

- Crypto transfer: Copy the deposit address and send from your wallet - Bank transfer: Follow the provided bank details - Card purchase: Enter card details and amount

1. Wait for confirmation (varies by method)

Step 5: Make Your First Trade

1. Go to the trading section
2. Search for your desired trading pair (e.g., BTC/USDT)
3. Choose order type:

- Market order: Buy/sell instantly at current price - Limit order: Set your desired price

1. Enter amount and confirm the trade

Pro Tips for Beginners

1. Start with small amounts while learning
2. Use limit orders to get better prices
3. Never invest more than you can afford to lose
4. Keep most funds in cold storage for long-term holding
5. Learn to read basic charts before trading actively

How does Bybit stack up against other major exchanges? Here's a detailed comparison:

Bybit vs Binance

Both are derivatives-focused exchanges with similar fee structures. Binance offers slightly higher max leverage (125x vs 100x) and has more product variety (Launchpad, NFTs, DeFi). Bybit has a cleaner interface specifically optimized for perpetual trading. Binance has faced more regulatory scrutiny globally. For pure derivatives trading, Bybit edges out slightly on user experience; for a complete crypto ecosystem, Binance offers more.

Bybit vs Coinbase

These serve completely different markets. Coinbase is for beginners and long-term holders who want regulatory protection and fiat integration. Bybit is for active derivatives traders who want low fees and leverage. Coinbase charges 0.40-0.60% for spot trading vs Bybit's 0.10%. If you're in the US, Coinbase is your option anyway since Bybit is unavailable.

Bybit vs Kraken

Kraken is the security-focused choice with full US regulation and insurance on fiat deposits. Bybit offers higher leverage (100x vs 50x) and lower perpetual fees. Kraken has better fiat on/off ramps and banking integrations. For US traders or those prioritizing regulatory safety, choose Kraken. For international derivatives traders, Bybit is better.

Bybit vs OKX

Very similar platforms competing for the same market. OKX offers slightly lower spot fees (0.08% maker) and similar perpetual fees. Both have copy trading, both restricted in the US. OKX has a slightly broader DeFi ecosystem; Bybit has arguably better derivatives UI. Choose based on which interface you prefer - both are excellent for derivatives trading.

Trustpilot

On Trustpilot, Bybit holds a 2.4/5 rating from 4,800+ reviews as of January 2026. Common praise: excellent derivatives trading, competitive fees. Common complaints: verification delays, withdrawal holds.

App Store Reviews

The iOS app rates 4.6/5 from 150K+ reviews. The Android app rates 4.5/5 from 500K+ reviews. Users praise the clean interface for futures trading.

Reddit Sentiment

On r/Bybit and r/cryptocurrency, derivatives traders view Bybit favorably for its liquidation engine and copy trading. Concerns about offshore jurisdiction.