We've witnessed a financial revolution over the past few years with cryptocurrency. Perhaps the best example of this is the digital currency Bitcoin with its aggressive performance.
What can we say about its value over time? Bitcoin's trajectory has proven so solid, it has garnered the nickname "digital gold."
But there's been a quieter revolution taking place within the cryptocurrency market that investors also need to know about. Over the last handful of months, the crypto derivatives market has proliferated, surpassing the spot market.
What's driving this change? Many recently launched derivatives exchange platforms featuring higher leverage and unique contracts. What do crypto traders need to know about these exchanges?
In this article, we'll make a head-to-head comparison of Bybit vs Binance. And we'll also take a look at some of the richest crypto traders' best-kept secrets, like a Portuguese D7 Visa, to keep more of their yields. Here's what you need to know.
Bybit vs Binance: An Introduction
What's one of the top secrets of successful crypto traders? Finding a platform that lets you maximize profits. Doing this requires a little research into various exchanges. And you'll find each one has specific strengths and weaknesses.
With that in mind, let's take a look at Bybit and Binance.
Bybit: The Basics
Founded in March 2018, the Bybit platform is a crypto-derivative exchange headquartered in Singapore. It enjoys the distinction of being one of the fastest-growing exchanges on the market, and it boasts more than 1.2 million registered users to date.
Binance: The Basics
As for Binance? It currently occupies a position as the leading crypto exchange on the market despite having launched in 2019. Known for its stable trading platform, customers also rave about its unique products and liquidity.
Binance exchange represents a significant player in the crypto-sphere, and it continues to have an incalculable influence on bringing more mainstream consumers on board. With this platform, you'll enjoy various trading products in the derivatives segment.
These include vanilla options, leveraged tokens, and perpetual futures. Best of all, Binance offers leverage up to 125x.
Bybit vs Binance: Trading Platforms
Now that you've got a fundamental understanding of each exchange, it's time to focus on their trading platforms. By doing this, we'll gain insight into user-friendliness and some of the features that customers most appreciate.
Bybit's Trading Platform
If you're looking for a smart trading platform with an innovative layout and 99.9% system functionality, Bybit's an excellent option. It can process up to 100,000 transactions per second, which means you won't have to worry about the system getting overwhelmed by trading surges.
The exchange's cutting-edge mark and index pricing mechanism go a long way towards preventing unfair liquidation, and its proactive system APIs refresh market data every 20 milliseconds.
The depth of liquidity enables traders to get instantly executed with a minimal price impact. The exchange also features the ability to integrate favoured trading bot services using API keys and more.
Binance's Trading Platform
Like Bybit, Binance's trading platform also features a simple and highly intuitive platform interface. If you've ever used the exchange's spot trading interface, it proves very similar.
You'll find a wide variety of product features and offerings, and the platform has a well-laid-out structure switchable between different product segments.
Whether you go with Bybit or Binance, you'll enjoy robust platform architecture.
Leverage Options and Futures Contracts
What else do you need to know about each of these platforms? Let's take a look at leverage options and futures contracts.
Bybit: What You Need to Know
Bybit comes with some fascinating features. For example, it's one of the only platforms on the market today that offers futures trading with EOS and XRP contracts.
The exchange permits users to leverage up to 100x on inverse perpetual contracts on BTC and USD. What about other futures contracts? Users get up to 50x on the rest.
All told, Bybit allows trading in ten different perpetual futures contracts. These contracts include:
As you can see, you'll have plenty of options when it comes to Bybit. But how does it compare to Binance?
Binance: What You Need to Know
Binance also offers a wide range of products in the futures market. Boasting more than 1,100 markets, you'll enjoy myriad options with this exchange.
For example, Binance offers USDT-M futures. Similar to traditional standard futures, USDT-M futures are margined and settled in USDT, as the name suggests. Possible leverage starts at 20x but can hit up to 125x for investors who know what they're doing.
When it comes to vanilla options, these European-style option contracts occur in Bitcoin and get settled in USDT. With these transactions, leverage levels vary greatly and are subject to the expiry of the agreement and its strike price.
What if you'd like to gain exposure in crypto without actually owning it? That's where COIN-margined futures come into play. These perpetual futures come with a maximum leverage of 125x.
What else do you need to know about Binance? The exchange offers leveraged tokens, permitting you exposure to underlying assets or tokens. These leveraged tokens can be traded, like other leveraged products, and are perpetual contract baskets.
How do leverage token prices track? They follow price changes in the perpetual contract market. That said, leverage levels vary from underlying prices, typically falling within the range of 1.25x to 4x.
Bybit vs Binance: How Fees Stack Up
How do these two platforms compare when it comes to fee structures? From trading fees to those on withdrawals, here's what you need to know about each platform.
With Bybit, you'll deal with the maker-taker pricing model.
Taker fees sit at 0.075%, and maker fees come in at 0.025%. These fees are applicable on USDT contracts as well as inverse perpetual contracts.
Besides trading fees, what do you need to know about deposit and withdrawal fees? Bybit permits users to make deposits through wallet transfer or direct purchase with fiat currency. And you won't deal with any deposit fees unless it's for fiat-to-crypto conversion.
As for Binance? The exchange is known for having competitive trading fees and a flat trading fee structure for takers and makers. Trading fees get based on a 30-day trading volume, with the first level (VIP 0) sitting at a trading volume of less than 50 BTC and a rate of 0.1%.
If you decide to go with Binance, you should also be aware that transactions with its native BNB token come with a 25% discount on trading fees.
How much will withdrawals via Binance cost you? Users must pay a flat fee, which covers the expense of moving digital currencies from their Binance wallet. Ultimately, this depends on the network fee required to process a transaction.
From coin to coin, the minimum withdrawal limit varies. For example, you'll pay a withdrawal fee of 0.0005 BTC on a withdrawal of Bitcoin that's 0.001 BTC. Of course, this changes with the market.
Bybit vs Binance: Security
No comparison of cryptocurrency exchanges would be complete without taking a good look at security. After all, security remains one of the most significant factors for users opening a new account.
You'll be pleased to know that Bybit features a robust security management framework. This framework includes two-factor authentication, which prevents unauthorized sign-ins. And the cold-wallet system handles fund security.
With Bybit, more than 90% of users' funds stay in an HD cold wallet system, and it also offers a multi-signature address mechanism designed to nix fraud vulnerabilities.
Binance boasts a multi-tier security architecture. It has two-factor authentication, designed to prevent unauthorized sign-in. And customers enjoy the added protection of cold-wallet systems, which translate into fund security.
The exchange relies on both cold and hot wallets. Like Bybit, funds get stored in cold wallets to ensure fund safety. But if you go with Binance, we recommend not storing your assets in the Exchange Wallet. Instead, it should go in the Trust Wallet, the more secure of the two options.
Secrets of the Best Crypto Traders
Now that you've explored two cryptocurrency exchange options that can help you earn on your digital assets, let's talk about some secrets employed by successful crypto traders to take full advantage of their earnings.
The biggest crypto traders understand that taxes can take a massive chunk out of the money they generate using an exchange. That's why a growing number of crypto traders have decided to relocate to crypto tax havens such as Portugal.
With the D7 visa, these individuals enjoy the Portuguese tax authority's take on digital currencies, which doesn't charge VAT or capital gains on personal gains made on cryptocurrencies.
Find out more about how cryptocurrency investors use tax havens like Portugal to take full advantage of their digital currency investment gains.
Tips for Crypto Traders
As you can see, there are many reasons why customers turn to Bybit and Binance for their cryptocurrency needs. Both exchanges offer easy-to-use trading interfaces, and they each boast top-rated security systems.
That said, you'll need to research these platforms carefully to ensure you choose the right one to meet your investment objectives. You should also consider a tax haven such as Portugal to keep more of your earnings in your pocket.
Are you interested in more tips for crypto traders? We've got you covered. Check out our website to learn more about cryptocurrency exchanges worth exploring.