Deribit Review 2023
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With the immense popularity of cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), a great number of cryptocurrency exchange platforms emerged in order to create a stable trading market for cryptocurrencies.
One such platform is Deribit, an attractive and globally available derivative crypto exchange. The platform’s name derives from two words; “Deri” as in derivatives and “Bit” as in Bitcoin. Deribit is an online trading platform that focuses mostly on options trading and futures for Bitcoin worldwide.
Keep reading our detailed review to find out more about the platform’s trading features, supported currencies, fees, and anything else it has to offer.
About the Trading Platform
Deribit is a European crypto trading platform for Bitcoin futures and options trading, founded in 2016 and originally headquartered in the Netherlands. This country might be the home of many delightful things like a variety of soft cheeses, craft beers, and medieval castles, but it’s also the home of many renowned cryptocurrency exchanges such as LiteBit, Bitonic, and Bitrush.
The platform was founded by the current CEO John Jansen and acting CTO Sebastian Smyczynski. Both of the founders are Bitcoin enthusiasts and their goal was to create their own platform that would introduce the world of cryptocurrency to their local traders.
Deribit offers Bitcoin options and futures with up to 100x leverage but doesn’t offer derivatives trading in any cryptocurrency other than Bitcoin. One of the more impressive features of Deribit is the technology behind its platform. The exchange was designed to process a high number of transactions in a short amount of time, i.e. with low latency (<1/ms).
Moreover, Deribit is one of the most transparent platforms on the market. The company behind the platform, Deribit B.V., doesn’t hide the identity of its employees and owners. On their deribit.com website, you can find pictures and short biographies of all their employees. This makes new users trust the company because it’s less likely for the platform to be involved in any frauds or scams.
In 2020, the exchange announced that they will relocate their office to Panama in order to avoid the mandates of the fifth Anti-Money Laundering directive or (AML 5). As of February 2020, the company is operated by a Panama subsidiary of the original Dutch company Deribit B.V.
There are a few noteworthy features that Deribit offers and we’ll talk about each of one them in more detail below.
The Deribit platform uses a web-based trading platform that includes an intuitive, easy-to-use, and beginner-friendly user interface. The UI gives you quick access to the platform’s order book and your trading history and most recent trades. Deribit also incorporates futures, volatility and index charts, as well as a range of statistics, technical analysis, and key data that corresponds with options and futures trading.
The Deribit platform is a technologically advanced platform and the utilized technology enables users to trade through the platform’s trade matching engine with a latency of less than 1MS. Users can also opt-out to trade through the web interface, API, and through the mobile interface that’s available for both Android and iOS devices. The platform also includes a trading bot software such as HaasOnline.
Deribit supports Ethereum and Bitcoin futures contracts, which are a type of agreement where you purchase the underlying coin for a predetermined price at a designated time in the future. The agreement to enter the contract costs $10 USD. Deribit also offers perpetual futures, i.e. futures that don’t have an expiry date. All of their settlements occur at 8:00 UTC (Coordinated Universal Time) on the last Friday of the month. There are three futures that occur quarterly: in March, June, September, and December. All generated profits are added in real-time.
Deribit offers European-style options, which means that options can be exercised only upon expiration. Before you transfer the assets, you need to regulate your cash settlements. The minimum order size is 0.1 BTC and 1 ETH per BTC/ETH contract for Bitcoin and Ethereum respectively and the markets are operational 24/7.
The platform also provides additional information on the Delta (underlying price sensitivity), volatility, and lots of other useful information. Users can see their recent trades, order books, and also check their order history and trade history.
There is also a variety of options available like limit, market, stop-limit, and stop-market.
Limit options have a predetermined price and can be cancelled if executed or removed manually. Market orders are immediately executed at the best available market rate. Stop-Limit options are limit orders with an attached stop-loss order. They can be executed only at the market price and users can force a stop loss to protect any losses. Finally, stop-market options are market orders with an attached stop loss. They can be executed only at the market price and like the Stop-Limits, users can force a stop loss to protect any losses.
Bitcoin and Other Supported Cryptocurrencies
The Deribit exchange supports Bitcoin and Ethereum. For any options, trades, perpetual contracts and futures with cryptocurrencies, users must deposit either Bitcoin or Ethereum because the platform doesn’t support other digital assets.
At the moment, there is no support for fiat currency deposits and experienced traders can make BTC or ETH purchases with fiat on some other popular exchanges like Coinbase, Bitmex, and Binance.
Deribit allows users to choose from both futures and options exchanges. The platform’s speciality is leverage trading with up to 100x for Bitcoin and up to 50x for Ethereum. There is also a margin trading option, as well as a Deribit testnet practice account where users receive 10 BTC of demo account funds to practice their trading strategies before investing their own money.
Trading Fees and Limits
The Deribit platform doesn’t charge any deposit fees but there are withdrawal fees that are dependent on the Bitcoin network’s mining fees. Deribit accepts only BTC payments as deposits and fiat currency deposits are still not available on the platform.
Before we explain the fees, we’ll provide information on how to withdraw from Deribit. In order to withdraw from Deribit, users must connect their wallet address to the platform when they create their Deribit account. The process is simple and functions like any other exchange.
The Deribit exchange employs a maker-taker fee model. Futures trading orders that improve the platform’s liquidity get a rebate of 0.02%, while orders that take liquidity are charged with a 0.05% fee. With perpetual contracts, makers receive a rebate of 0.025%, while takers pay 0.075% per order.
The options trading fees include 0.04% for an underlying option contract or 0.0004 BTC/options contract with an options liquidation fee that costs 0.19% per underlying option contract or 0.0019 BTC/options contract.
For both futures and liquidations contracts, 0.30% of the fee goes to the Deribit insurance fund, while 0.15% of the underlying option contract or 0.0015 BTC per contract goes to the insurance fund for options liquidations.
Is Deribit Safe to Use?
In terms of safety, Deribit is not regulated or licensed by any official financial body and the platform operates without any regulatory oversight.
There are safeguards implemented by Deribit for asset protection and one of them is keeping 99% of client assets in cold storage, with 1% kept in software storage for daily withdrawals.
Moreover, every customer is subjected to a KYC procedure and this shows that the company takes the Anti-Money Laundering laws and regulations seriously. The KYC check requires users to verify their identity by providing a legal bank document or a government-issued identification card because, without any credentials, users will be limited to daily trading limits of 2 BTC.
The Deribit website is available in multiple languages including English, Spanish, Turkish, Chinese, Russian, Japanese, and Korean. In addition to language support, there is a 24/7 customer support team to deal with any user issue and answer questions related to the platform. The Deribit support team can also be contacted through email, their Twitter account or on their Telegram group. There is a designated YouTube channel for Deribit where users can watch a wide range of explanatory videos. Unfortunately, there are no live chat options and a direct phone line, but their email support is quick and responsive for any users’ questions.
A Few Words Before You Go...
In terms of tradable markets and derivative markets, Deribit is an excellent platform. The opportunity to trade Bitcoin and Ethereum derivatives through futures and options is a feature that not many exchanges can offer. Deribit offers a vast variety of markets for users to choose from and all of them can be traded at competitive fees. Also, they provide a mobile app and responsive customer support.
On the other hand, the one thing that really sets them back is the regulation question. As they are a Panama-based company they are not regulated by any relevant financial body and users will have to conduct trades at their own risk. Up to now, things seem alright because the platform hasn’t been subjected to hacks or controversies but still, the risk lingers in the air.
frequently asked questions
Yes, Derbiit offers an app both on Android devices as well as iOS devices. Every trading feature of the main desktop platform is available on the mobile app but the most recent reviews are in the range of mediocrity. The Play Store review states that the Deribit app has a 3.5 out of 5 stars and the same story is with the Apple Store.
There is also a two-factor authentication system to use with your mobile device for extra protection for your account.
Deritibt supports mostly European countries with some exceptions such as Cuba, Canada, The United States, Guam, Iran, Iraq, Japan, South Korea, North Korea, Panama, Puerto Rico, Samoa, Sudan, Syria, and the Virgin Islands.