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Participating in the global cryptocurrency market is only possible with a cryptocurrency exchange (a digital marketplace where people can buy, sell, and trade cryptocurrencies), and Bybit has risen to become one of the biggest and most trusted crypto exchanges used by over 15 million users worldwide.
Regarded as one of the most reliable crypto exchanges ever to exist, this platform is open 24 hours per day, 365 days per year and it allows users to place orders on numerous cryptocurrencies available for trading on the platform.
In this review, we will be breaking down what the cost of trading on this platform. We will also be breaking down any additional fees we have seen sub-charged from our trading accounts (deposit, withdrawals, makers and takers fees, and more) while testing this Bybit crypto exchange platform.
But before we start delving into the specifics of Bybit fees, let’s first understand what trading fees are and how they work when using a crypto exchange trading platform.
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What Are Trading Fees?
Trading fees refer to the charges imposed by cryptocurrency exchanges for executing trades on their platforms. These fees help cover the operational costs of the exchange and can vary based on different factors, such as the type of trade, trading volume, and the fee structure implemented by the exchange.
Trading fees are essential to any cryptocurrency exchange, and Bybit is no exception. As a popular trading platform, Bybit offers a variety of features and services to its users, but it’s crucial to understand the costs involved in trading on the platform.
In this article, we will explore Bybit fees in detail, covering various aspects such as trading fees, maker-taker fee structure, spot trading fees, derivatives trading fees, deposit and withdrawal fees, leverage fees, and funding fees.
By understanding these fees will help you make informed decisions and manage your trading costs on Bybit.
Are you new to the idea of crypto leverage trading? Check out this Guide: A Beginners Guide to Day Trading Cryptocurrency
Understanding Makers and Takers in Trading
To comprehend how Bybit fees work, grasping the concept of makers and takers in trading is crucial. Marketplaces match buy and sell orders through order books, and the maker-taker system classifies these orders to determine trading fees. A maker refers to a trader who adds liquidity to the order book by placing limit orders.
On the other hand, a taker removes liquidity by placing market orders. Bybit charges different fees to makers and takers based on their role in the trading process.
For example, Bybit offers the Market Maker Incentive Program for traders to get up to 0.015% in maker fee rebate.
Bybit Trading Fees: How Do They Work?
Bybit implements a transparent fee structure that aims to provide competitive trading costs to its users. The fee structure consists of maker and taker fees, calculated based on a percentage of the trading volume.
Typically, makers enjoy lower fees than takers since they contribute to the platform’s liquidity. By encouraging liquidity provision, Bybit incentivizes makers with reduced fees.
Understanding Bybit’s Maker-Taker Fee Structure:
Bybit distinguishes between maker and taker fees based on order execution speed. Market orders are taker orders executed immediately.
In contrast, traders place limit orders at a specific price, and the execution occurs when the market price reaches or exceeds the specified limit. The classification of limit orders as maker or taker orders depends on the timing of their execution
- Taker Fee: Order Value × Taker Fee Rate
- Maker Fee: Order Value × Maker Fee Rate
Calculating Bybit Spot Trading Fees
Spot trading refers to the buying and selling of cryptocurrencies for immediate settlement. These fees vary depending on the trading pair. Bybit’s fee calculation method is straightforward, ensuring transparency, and it is calculated using the formula below:
Formula:
Trading Fee = Filled Order Quantity x Trading Fee Rate
Example
Suppose the current price of ETH is $30,000. Traders can buy or sell 0.6 ETH with 10,000 USDT.
- Trader A buys 0.6 ETH using a Market Order with USDT.
- Trader B buys 10,000 USDT using a Limit Order with ETH.
- Taker’s Fee for Trader A = 0.6 x 0.10% = 0.0006 ETH
- Maker’s Fee for Trader B = 10,000 x 0.10%= 10 USDT
After the order is filled:
Trader A buys 0.6 ETH with a Market Order, so Trader A pays a taker’s Fee of 0.0006 ETH. Therefore, Trader A will receive 0.5994 ETH.
Trader B buys 10,000 USDT with a Limit Order, and 0.1% of the maker’s Fee is incurred. Therefore, Trader B will receive 9,990 USDT.
Bybit Derivatives Trading Fees
Besides spot trading, Bybit also offers derivatives, allowing users to trade cryptocurrency contracts, such as perpetual and futures contracts.
Derivatives trading fees on Bybit are structured differently compared to spot trading fees. They are typically calculated based on the notional value of the contract and the type of order placed. Bybit derivatives fee can be calculated using the formula below:
Formula:
Trading Fee = Order Value × Trading Fee Rate
Order Value = Quantity / Executed Price
For example, Trader A buys 5,000 ETHUSD contracts using a Market Order. Trader B sells 5,000 ETHUSD contracts using a Limit Order. If the execution price is $40,000:
- Taker fee for trader A = 5,000/40,000 × 0.06% = 0.000075 ETH
- Maker fee for trader B = 5,000/40,000 × 0.01% = 0.0000125 ETH
Upon execution, Trader A will pay a taker’s Fee of 0.000075 ETH. Trader B will pay a maker’s Fee of 0.0000125 ETH.
Deposit and Withdrawal Fees on Bybit
Currently, no deposit fees are associated with trading cryptocurrencies on the Bybit platform. However, Bybit applies charges for withdrawals. These fees are typically imposed to cover the transaction costs of transferring cryptocurrencies from the Bybit platform.
The withdrawal fees vary depending on the specific cryptocurrency and its blockchain network. Bybit provides transparent information regarding these fees on its platform.
Understanding Bybit Leverage Fees
Bybit allows users to trade with leverage, enabling them to amplify their trading positions. However, it’s important to note that leverage trading involves additional costs in the form of leverage fees. Bybit charges funding fees for positions held using leverage.
These fees are applied periodically to compensate traders with positions in the opposite direction, balancing the market. The funding fees are determined based on the interest rate differential between long and short positions.
By accessing the funding fees section on Bybit’s website, traders can stay informed about the current rates and understand how they impact their trading costs. Traders must factor in these fees when considering leverage trading on Bybit to ensure a comprehensive understanding of the overall costs involved.
How Do These Fees Affect Your Trading ROI?
By accessing the fee schedule and funding fees section on Bybit’s platform, traders can optimize their strategies and maximize their potential returns.
Regularly reviewing and analyzing the fee structure is recommended, as it may be subject to changes based on market conditions and exchange policies.
Bybit is still one of the leaders in the industry when it comes to giving users very competitive fee structures on their platform
In Conclusion
Bybit offers a comprehensive fee structure covering various trading aspects on its platform. Understanding these fees is essential for traders to manage their trading costs and make informed decisions effectively.
Bybit’s transparent fee schedule, including maker-taker fees, spot trading fees, derivatives trading fees, deposit and withdrawal fees, leverage fees, and funding fees, provides traders with the necessary information to calculate their expenses accurately.
Traders should consider their trading volume, the type of orders they place, and the specific cryptocurrencies they trade when calculating their fees.
If you are interested in learning more about how Bybit operates and how you can take the next step to sign-up and use this crypto exchange, check out this Beginner Guide: A Step-by-Step Tutorial on Leverage Trading on Bybit
