As Crypto Derivatives Realign, Bybit Offers New USDT Contract and Features

March 2020 will be remembered as a
catastrophic year for the global economy. Fears of an economic recession caused
by the COVID-19 pandemic have driven the stock market and other investment
vehicles into a freefall. Unfortunately, digital assets were not exempt from
this reality.

Notably, a Bitcoin flash crash pushed the
price below $4,000 for the first time since December 2018, according to CoinMarketCap.
The implications weren’t just for real-time traders. Bitcoin derivatives, a
popular investment product in the space that, among other things, allows
traders to take long and short positions on the currency, plummeted as BitMEX,
the most popular derivatives exchange before the crash, couldn’t handle the
sudden price fluctuation.

Now, Bybit, a competing global derivatives
trading platform, has stepped up, offering new functionality and a promise for
reliability that serves as a contrast to the recent challenges at BitMEX.

Indeed, Bybit CEO Ben Zhau was quick to enter
the conversation, tweeting the platform’s 24-hour stats, in a
not-so-subtle jab at its struggling competitor. However, Bybit isn’t just
offering tweets. On March 24th, Bybit announced the addition of Tether
perpetual contracts to its other crypto-backed investment products.

This new Tether (USDT) offering allows
investors to hold both long and short positions at the same time while managing
different leverages. When operating in cross-margin mode, traders can avoid
having positions auto-liquidated during market volatility, or they can enable
“auto margin replenishment,” where Bybit automatically adds a user’s existing funds
to their margin balance.

Just like Bybit’s existing perpetual
contracts, USDT contracts don’t expire, and the price is linked to the
underlying index, providing traders with full price accuracy at a time when
many are rightly skeptical about the efficacy of some critical data.

At the same time, Bybit announced several
other platform enhancements, including:

• A take-profit/stop-loss setting.
• Faster position open and close
  functionality to allow quick trades during market volatility.
• The ability to flip positions
  directly on the chart.
• More competitive margin trading
  requirements.
• A shared insurance fund for
  traders launching multiple contacts.

These new features are immediately available
for Bybit users, giving them a unique opportunity during these uniquely chaotic
times. As financial markets of every kind prove that instability is, to some
extent, the new normal, investors are looking for signs of reliability from the
platforms where they navigate this challenging space.

What’s more, both the established
functionality and the additional features place Bybit in stark contrast to the
challenges facing BitMEX.

Bitcoin’s flash crash prompted more than $700
million in long liquidations before the platform enacted a “circuit breaker,” a
stock market feature that pauses trading when prices decline too rapidly. The
criticism was unanimous. As one Twitter user wrote, “BitMEX ceased to be a full functioning
exchange for about 18 hours.”

BitMEX has offered a range of explanations for
the incident, including a pair of DDoS attacks that rendered its platform
inoperable at a critical time. Of course, having already endured a devastating
data breach in 2020, identifying a cybersecurity vulnerability as the culprit
is problematic. Taken together, many crypto traders are skeptical of the
explanations emanating from BitMEX, making the platform’s incident both a
practical and a PR disaster.

Consequently, while Bitcoin’s price has inched
higher – it’s currently trading at just over $6,000 at the time of writing
– Bitcoin derivatives are seeing a realignment, as other platforms strive
to step up where BitMEX has fallen.

BitMEX has an uncertain future ahead, as it
navigates the problematic, costly, and uphill battle of restoring customer
confidence and repairing its technological capability. Meanwhile, its
competitors are doing everything they can to put forth the most compelling
platform possible. The result is a realignment among crypto derivative
platforms as they work to achieve dominance in the crypto investment space.