Bybit, a Dubai-based cryptocurrency exchange, has quickly become the second-largest exchange in the world mostly because it filled the void FTX used to occupy before its demise and by capitalizing on recovering crypto markets. This recovery has partly been due to more businesses adopting cryptocurrencies all around the world. Crypto has been adopted within the travel, tourism, e-commerce, gaming, and gambling industries. For example, crypto casinos which allow players to wager using digital currencies and bypass KYC requirements have boomed in popularity (source: cryptocasino.ltd). Similarly, a growing number of travelers are funding their trips with digital currencies. With more businesses like gaming, gambling sites, and travel operators accepting crypto, exchanges like Bybit are simply doing more business.
With that said, let us now look at what Bybit has done to take over FTX’s role.
Bybit’s Strategic Move
During the drama surrounding FTX’s demise, Bybit kept tabs on the challenges faced by FTX and how they could position themselves to be a major player in the market. Bybit then quickly adapted its marketing strategies and operations specifically to fill the gap left by FTX’s fall, which resulted in this exchange gaining worldwide attention and solidifying its place in the crypto space.
Bybit adapted its operations by expanding on its existing liquidity pools and trading platform. These elements allowed them to efficiently accommodate a large user base seeking an FTX alternative.
This company also adapted its marketing strategies by creating marketing campaigns that emphasize the security, reliability, and competitive features of its platform. This aggressive approach attracted many traders who didn’t have an option they could depend on after FTX fell. In addition to these campaigns, Bybit also targeted many traders who were specifically affected by FTX shutting down, and it was this targeted outreach approach that played a part in them making international headlines.
Growth and Expansion
Bybit has become the second-biggest crypto exchange in the world by trading volume, a milestone they achieved by obtaining over 30 million registered users. This achievement has also been accompanied by a period of outstanding growth that we can see in their market share numbers. According to a recent Kaiko Research report, Bybit’s spot trading market share skyrocketed by over 400% from the 2% share it had in 2023 to the breathtaking 16% figure it now stands at.
Bybit has said a big factor behind this growth is their uncompromising dedication to bolstering user trust and security. One of the ways Bybit improves trust with users is through the regular proof-of-reserve audits they conduct to maintain accountability and transparency so users know what’s happening with their funds. Additionally, Bybit has an impeccable security record as they haven’t had any hacking incidents or major breakdowns since they started operating in 2018. This excellent security record is why Bybit has received an AA rating recently from the CCData Crypto Exchange Benchmark Report and also got a 10/10 Trust Score from CoinGecko.
Another factor that has contributed to Bybit’s growth is the company’s expansion into Web3 solutions. The platforms they’ve created, like NFT Pro, Inscription Marketplace, and Airdrop Arcade, have simplified user experiences and lowered entry barriers to investment opportunities in promising upcoming projects and tokens. There are also many online stores, anonymous casinos, and gift card stores that facilitate transactions from exchanges, which has made retail buying opportunities accessible on Bybit.
Innovative Trading Solutions
Bybit has also become very popular due to the innovative trading solutions they offer, such as the various margin trading features they have on their platform. One of these features is the regular margin trading option, which lets users utilize the assets they have in their spot accounts as collateral when they want to borrow additional funds to trade with from Bybit. This feature allows traders to open positions that are bigger than their wallet balances with leverages capped at 10x on the spot market.
With the regular margin trading feature, all assets supporting a position in a user’s spot account can serve as collateral to prevent liquidation. These assets can be sold off automatically by the system as it recoups the amounts it lent should a user’s risk level reach a critical point.
Bybit also has another margin trading feature known as the cross-margin mode, which lets traders use all the balances they have available in their standard account as collateral. This feature reduces the chances of a trader’s position being liquidated, which has made it great for hedging.
Another margin trading feature offered by Bybit is the isolated margin mode that limits the margins placed on a position. This feature liquidates positions if they fall below set minimums but limits trader losses to their position margins and doesn’t affect their account balances by isolating collateral.
Future Outlook
As crypto markets continue to grow, Bybit’s relationship with prime brokers is going to evolve as the market share this exchange has managed to acquire, and steady growth makes them attractive partners. And since prime brokers are crucial at offering clients in providing liquidity and acceptance by institutional traders, Bybit’s growth could lead to further adoption of this exchange.
