Bybit

Bybit is a centralized cryptocurrency exchange and institutional services group that primarily provides spot and derivatives trading, institutional custody, and liquidity services. Founded in 2018 and led by co‑founder and chief executive officer Ben Zhou, the business built its reputation on high‑performance derivatives matching engines and deep order‑book liquidity. In 2025 the firm formalized a European hub and regulatory footprint, positioning itself as a compliant market participant for the European Economic Area (EEA) while continuing to operate large global trading venues from its international offices.

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Note on fees: Bybit publishes a tiered maker/taker schedule and VIP/volume discounts; derivative products typically carry lower maker rates than spot, and funding rates on perpetual contracts are market‑driven and updated frequently. Withdrawal and network fees depend on blockchain conditions and are shown at the point of withdrawal; custody for ongoing contractual relationships is generally offered without a standing custody charge while other administrative fees may apply in exit or special‑case scenarios.

Company Overview

Bybit is a trading‑first company that excels at derivatives execution while offering a full complement of spot markets and retail‑facing services. The platform’s architecture is engineered for low latency and deep liquidity, which draws professional traders and algorithmic strategies as well as active retail traders. In Europe the company has moved from a market‑entry posture to an identified regulatory presence, with a European operating entity and permissions intended to provide pan‑EEA services under the Markets in Crypto‑Assets Regulation (MiCA). That regulatory positioning carries practical implications for users: stronger consumer protections, standardised custody rules for crypto‑asset service providers (CASPs), and the application of European data protections such as the General Data Protection Regulation (GDPR). Reviews of Bybit’s trading conditions generally praise its order‑matching performance during normal market windows, while commentary about scalping and ultra‑high‑frequency approaches is mixed due to execution variability during news and extreme volatility.

Company History & Development

Bybit launched in 2018 with a focused product vision: build an exchange engineered for derivatives first, then layer spot and complementary retail services. The founding story centers on rapid product development and a competitive push into perpetual contracts and high‑leverage markets, which helped the company attract a professional trading community that valued matching speed and available liquidity. Early growth was driven by product innovation—perpetual swap products, cross‑margining features, and an expanding suite of order types that appealed to derivatives traders.

Between 2019 and 2023 Bybit scaled rapidly, adding more spot listings, institutional‑grade APIs, and copy‑trading mechanisms. The platform also pursued geographic diversification, establishing corporate presences and partnerships that enabled fiat on‑ramp options in multiple regions. As regulatory scrutiny hardened across multiple jurisdictions, Bybit iteratively adjusted its footprint: it established local partnerships in some countries, paused or restricted services in others, and invested in compliance tooling and staffing.

In late 2024 and into 2025 the company’s trajectory was shaped by two contrasting forces: an intensifying regulator focus in Europe and an unprecedented operational stress event. Regulators in several European markets scrutinised non‑local services; in response Bybit pursued formal authorisation under the new EU Markets in Crypto‑Assets Regulation, establishing a European hub to deliver regulated CASP services across the European Economic Area. That licensing effort culminated in a formal MiCA authorisation for an Austrian entity in mid‑2025, marking a strategic commitment to conduct core custody and exchange services under a unified EU regime.

The company also faced the largest security incident in the history of crypto exchanges in early 2025, when a sophisticated exploit led to the theft of a substantial Ether‑denominated holding from a cold‑wallet transfer. The attack triggered intense forensic work, third‑party audits and an industry‑wide co‑ordination effort to limit further laundering. Bybit publicly reported a rapid replenishment of reserves and engaged independent auditors to validate solvency and to publish proof‑of‑reserves snapshots. The incident tested the firm’s operational resilience and its relationships with liquidity partners and security firms; it also accelerated transparency measures and raised the bar for internal controls.

Strategically, Bybit now balances two priorities: maintain a high‑performance execution venue that attracts derivatives volumes while embedding a compliance, custody and governance layer that aligns with EU regulatory expectations. The establishment of a Vienna hub creates a legal and supervisory anchor in the EEA, and the company has announced recruitment and partnerships to localise operations and academic collaboration. The net effect is a transition from a purely growth‑at‑scale derivatives operator to a hybrid model that must reconcile trading innovation with the obligations of an EU‑regulated financial services provider.

Business Model & Core Services

Imagine a digital marketplace where people buy and sell tokens, and professional traders place bets on whether prices will move up or down. Bybit runs that marketplace and charges small percentages when trades happen—the equivalent of a toll on a busy bridge. The firm’s core offerings are simple to picture: spot trading for buying and holding tokens, derivatives such as perpetual contracts and futures for leveraged trading, and institutional services like custody and over‑the‑counter (OTC) block trading desks for large traders.

Revenue flows look like everyday business fees: trading fees when orders execute, funding and settlement accruals for perpetual contracts, subscription or premium rates for institutional services, and incidental fees such as withdrawal or settlement charges. For example, the derivatives business earns not only the maker/taker spread but also benefits from funding rate mechanics on perpetuals, which are periodic payments between longs and shorts. Custody revenue is normally non‑material under ongoing agreements because the company’s European custody contract typically does not levy standing custody fees, but administrative and service fees can apply in special circumstances.

Bybit also offers value‑added consumer products—staking and reward programs, an NFT marketplace, and a card product in certain regions—each of which broadens engagement and creates incremental fee or float income. For institutional clients the firm provides API access, liquidity provisioning and bespoke pricing that converts high volume into lower per‑trade fees but larger absolute revenue.

Regulatory Compliance & Trust

Bybit’s regulatory posture evolved from informal cross‑border operations to an EU‑anchored regulated model. The company now operates an EU entity authorised under the Markets in Crypto‑Assets Regulation framework to provide custody, exchange and transfer services across the EEA, which brings standardised consumer protections and MiCA‑specific obligations. The firm’s custody agreement and legal terms explicitly align with MiCA provisions on segregation, liability and reporting. Bybit maintains GDPR‑conscious privacy notices and identity verification procedures designed to meet European data‑protection and anti‑money‑laundering standards. The regulatory record includes administrative enforcement in some jurisdictions prior to full alignment, and recent remedial measures have emphasised local licensing, cooperation with authorities, and improved transaction monitoring.

Economics & Value Proposition

Bybit competes on execution quality and breadth of product suite. Spot fees for retail users start at a symmetric maker/taker schedule, with material volume‑based discounts and a VIP tier structure that lowers costs for frequent traders; derivative maker rates are intentionally lower to attract liquidity provision. Perpetual contracts use a market funding mechanism, and fees for derivatives generally sit below spot for makers, reflecting the platform’s derivatives focus.

For European clients practical economics include lower friction from SEPA rails in regions where fiat rails are supported, transparent proof‑of‑reserves reporting that helps institutional due diligence, and the legal protections deriving from MiCA‑level custody obligations. Accessibility is broad—no general account minimum is required to open a Bybit account—but per‑asset minimum trade and withdrawal sizes apply and are published per token. For very high volumes, institutional or prime‑broker relationships unlock bespoke pricing and dedicated liquidity channels.

Trade‑offs are clear: active derivatives traders benefit from lower per‑trade costs and deep order books, but users who prioritise self‑custody or absolute minimum counterparty dependence may prefer non‑custodial solutions. Users should compare fee schedules, funding rate behaviour and custody terms versus alternatives when assessing total cost of ownership.

Technology & User Experience

Bybit’s technical proposition rests on a low‑latency matching engine and a multi‑layer wallet architecture. The platform promotes high throughput capacity and claims architecture optimised to avoid the outages that can afflict peer venues during volatility spikes. For ordinary trading sessions the system delivers responsive charting, advanced order types and a unified account model that supports spot, margin and derivatives within a single interface.

The user interface blends professional features with consumer accessibility: advanced charting and order types are available in the web and desktop clients, while mobile apps offer condensed functionality for on‑the‑go trading. APIs are comprehensive and used by algorithmic traders, market makers and institutional flow desks. Integration capabilities include FIX and REST endpoints plus websocket feeds for real‑time market data and order execution.

Customer support and post‑trade services have historically been a source of mixed feedback; many institutional relationships report dedicated account teams and fast responsiveness, while some retail users cite slower resolution times for complex disputes. During the security incident in early 2025 the platform coordinated with industry partners and external auditors to expedite liquidity support and proof‑of‑reserves validation, which demonstrated operational contingency planning under stress.

Innovation areas include decentralized finance (DeFi) integrations, liquid staking products and an evolving suite of risk‑management tools. Yet the user experience for ultra‑low‑latency scalping strategies is subject to variability—execution quality during macro news events or sudden volatility can differ from peak theoretical performance. For example, some high‑frequency and news‑sensitive traders report intermittent slippage and feed latency during spikes, while many professional users highlight the platform’s resilience and deep liquidity in normal market conditions. Traders who need nanosecond‑level determinism should validate live execution characteristics via small test trades and consider direct market‑maker relationships where available.

Scalping‑Friendliness (Commissions, Leverage & Slippage)

Bybit offers leverage across derivatives that appeals to active and professional traders, including high‑leverage instruments on selected products. The fee architecture and maker rebates can be favourable for liquidity providers, while taker fees are competitive for aggressive entrants. However, independent user reports show mixed scalping outcomes: many traders praise Bybit’s tight spreads and deep liquidity in calm conditions, yet anecdotal reports describe elevated slippage, delayed fills and execution quirks during major news releases or sudden liquidity withdrawals. The platform provides advanced options—API execution, VIP matching and maker incentives—that improve conditions for systematic traders, but those executing high‑frequency or news‑driven scalps should monitor fill statistics, use conservative leverage settings and test order‑routing behaviour under live conditions.

Derivatives Trading & Fees

Bybit’s derivatives offering includes perpetual swaps, quarterly futures and listed options. Base maker/taker rates on perpetual and futures contracts are materially lower than spot maker/taker rates, in keeping with the platform’s derivatives focus. Funding rates on perpetual contracts are dynamic, calculated from premium indexes plus clamp functions and exchanged at regular intervals; these rates may be favourable compared with peers depending on market structure and imbalance between longs and shorts. Institutional and high‑volume traders can access tiered reductions and bespoke pricing. Margin requirements, maintenance thresholds and liquidation mechanisms are transparent in product specifications, but traders should be mindful that leverage amplifies both gains and the risk of rapid liquidation during volatility.

Security & Risk Management

Bybit operates a layered wallet strategy—hot, warm and cold stores—and maintains proof‑of‑reserves processes and third‑party audits to validate solvency. After the 2025 wallet compromise the firm engaged forensic teams, coordinated with blockchain analytics providers and accelerated independent proof‑of‑reserves audits, which aim to demonstrate collateral coverage for in‑scope assets. Custodial services in the EU are contractually governed by MiCA‑aligned terms that require certain liability and reporting standards. Insurance coverage and indemnity structures vary by product and are not a substitute for rigorous operational controls; users should review custody agreements and insurance disclosures before entrusting large balances. Ongoing risk mitigation emphasises multi‑party signing, transaction monitoring and rapid incident response frameworks.

Market Position & Suitability

Bybit best serves active derivatives traders, professional market‑making outfits, and institutions seeking integrated execution and custody under a single counterparty. Conservative retail investors may appreciate the platform’s liquidity and regulated EU presence, while algorithmic traders will value API depth and tiered pricing—subject to live verification of execution characteristics. Trade‑offs include counterparty custody exposure, regulatory history that reflects past compliance gaps in some markets, and customer support variability for retail complaints. Users seeking custody with explicit MiCA protections and broad derivatives access will find Bybit compelling; users prioritising full self‑custody or the strictest anonymity should consider alternative custodial or non‑custodial approaches.

Conclusion

Bybit occupies a strategic place in the European crypto landscape: it combines derivatives‑first execution infrastructure with an emerging, regulated European operating model. The MiCA‑anchored EU entity and published custody agreements supply a layer of legal clarity that matters to regulated institutions and cautious retail clients in the EEA. At the same time the firm’s history—product innovation, rapid growth and a material security incident—reveals the tensions that define modern crypto incumbents: innovation and scale create new attack surfaces and regulatory obligations that must be actively managed.

For traders who prioritise execution, deep order books and competitive derivatives economics, Bybit remains industry‑leading in many respects. For risk‑sensitive users the European custody terms, periodic proof‑of‑reserves audits and the company’s regulatory commitments are tangible improvements. Enhanced transparency around incident response timelines, improved retail dispute resolution and continued hardening of supply‑chain controls would strengthen confidence further. In short, active traders and institutions looking for a derivatives‑centric venue with EU regulatory footing should consider Bybit while monitoring operational metrics and regulatory disclosures. Less active investors or self‑custody advocates should weigh the convenience of a full‑service platform against custody trade‑offs.

Last updated: October 1, 2025