Deribit Review

If you own crypto, it’s time to make it work for you. The Deribit platform is an exchange that supports futures and options trading with the two most popular digital currencies. In this Deribit review, you’ll learn how the platform works and whether it’s worth your while.

  • Ease of Use: 4/5
  • Supported Cryptocurrencies: 2
  • Buy with Fiat: No
  • Trading Style: Futures and Options
  • Security: 2FA
  • USA Support: No
  • Incorporated: Panama
  • Backups: Cold Storage

works on:

Android Android
Mac OS Mac OS
Windows Windows
Chrome Chrome

Best For

BTC and ETH derivatives traders

STRENGTHS

  • 24/7 trading hours
  • High leverage
  • Secure and trusted
  • Tutorials and demo accounts

WEAKNESSES

  • No fiat support
  • Data draining apps
  • Not suitable for beginners
  • Only Bitcoin and Ethereum supported

PRICING PLANS:

Deposits and withdrawals

Free

What Is Deribit

The Deribit Exchange is a derivatives trading platform for cryptocurrencies, more specifically Bitcoin (BTC) and Ethereum (ETH). Like traditional stock exchange and financial markets, it gives investors access to a liquid market to trade in futures and options, not just basic buying and selling of digital currency.

The company was founded in 2016. It was originally based in Ermelo, the Netherlands, but more recently, it moved to Panama.

The Deribit platform is one of the longest-running and most successful cryptocurrency exchanges on the web. Having had no major controversies and thus building up a high level of trust among its users

Deribit trading volume is very high, and there are thousands of daily users. At the time of writing, the last 24-hour Deribit daily volume was valued at over $1 million, with more than $1.7 million open interest. 

Part of Deribit’s popularity could be attributed to the fact that it sticks to the basics of being a margin broker and has not overexerted into other digital currency sectors. However, its lack of support for other cryptocurrencies has also become one of its negatives. 

If you’ve ever asked, ‘is Deribit legit?’ In short, yes! It closely follows the regulations of its supported countries and leads the pack in security. 

However, regulatory and political concerns prevent it from operating in all US states. Other restricted jurisdictions are:

  • Cuba
  • Ontario, Canada
  • Guam
  • Iran
  • Iraq
  • Japan
  • North Korea
  • Panama
  • Puerto Rico
  • Samoa
  • Sudan
  • Syria
  • Virgin Islands (US)

Residents of any other country are free to sign up and become Deribit crypto traders.

How To Use Deribit

Firstly, it’s important to understand that Deribit is not a place where you simply buy or sell virtual currency like Bitcoin. Also of note is that you can’t use your card or fiat to purchase x amount of BTC. 

Instead, users invest in more complex digital trading products called derivatives or contracts. They are based on the value of the underlying asset or currency. In this case, BTC/ETH. But you can’t buy it directly like a traditional foreign currency exchange. 

But more on that later. Now, let’s go through the registration process.

Signing up

The Deribit exchange initial sign-up is as simple as entering an email address, username, password, and country of residence. Then you just need to click the confirmation link in your email to activate the account. 

From there, you can view the exchange and its charts, and even ‘enroll’ in the educational videos program. But before you can send over your Deribit coin and start trading, there are some extra verification steps

Verification

After signing up, you must verify your account. First, this requires giving your full name, date of birth, and address

Second, you must provide a copy of an identification document. This may vary from country to country but typically includes a scanned copy of your passport, a national ID card, or driver’s license. If you don’t have access to a scanner, a close-up shot using your mobile phone is also acceptable.

Furthermore, to verify your address, you must provide a copy of a utility bill, tax bill, or letter from ‘authorities’ containing the name and address you gave upon registration.

You can only start trading after Deribit verifies this information.

Deribit: How to deposit and withdraw funds

Deribit doesn’t support fiat currency deposits like USD or Euros. It only accepts Bitcoin sent to your personal cryptocurrency wallet address. This can come from any other wallet you have access to and will appear as fast as the Blockchain allows – typically from a few minutes to a couple of hours. 

There is a minimum deposit limit of 0.001 BTC, which is the equivalent of roughly $47, €40, or £35 (at current exchange rates). 

There is no withdrawal limit on ID verified accounts, but this too can only be made in crypto, not fiat. Deribit withdrawal time is also as fast as the BTC or ETH network can handle.

User interface and API

Although any site of this kind is going to be difficult for beginners to get to grips with, the Deribit user interface is well laid out and easy to navigate. Experienced traders will find some familiarity right away, and it uses a trade-matching system with less than 1ms latency, so there’s no concern with timing. 

Moreover, the Deribit volume can be viewed from daily to all time, as well as by expiration for the current day and the top volume by instrument.

Expert traders and developers also get access to its API. There, you can create your own trading strategies and programs. You can use a personal API key or the public API if drawing from its market data. It supports both Websocket and REST.  

Trade types

Deribit futures can be traded in Bitcoin and Ethereum. The platform also supports perpetual contracts and BTC/ETH options.

Let’s take a closer look.

Futures

Whether you’re looking at Deribit Bitcoin futures or Ethereum, the process is the same. A future is an agreement (contract) to sell crypto at a set price or time in the future. The trade is to either buy long or sell short. In other words, you are betting on whether the price of BTC or ETH will increase or decrease. 

The company also offers perpetual futures, which don’t have a set expiry date.  The Deribit funding rate for such contracts is eight hours. This is based on the percentage difference between the market price of the contract and the ongoing price Index.  

The ‘Manage Future Positions’ tab lets you see your positions and earnings. Profits are added in real-time.

Options

Deribit Bitcoin options and Deribit Ethereum options are traded in European style. This means orders are only executed when they are set to expire. Furthermore, this is done immediately and automatically. 

You can easily navigate the data and order books, view the delta and volatility, and a myriad of other helpful information. 

The key difference between options and futures is that an option can be canceled, while once a futures contract is agreed upon, it’s set in place. However, there are some nuances in the order types.

Order types

Deribit takes all common order types, including:

  • Limit Order: Electronic execution occurs if your order reaches your predefined price or you manually cancel it. 
  • Market: An immediate order placed at the market/agreed price.
  • Stop Limit: The same as a limit order but with a stop loss to protect losses. I.e., a 10% stop loss below the price you bought it at means you cannot lose more than 10% if the trade is executed.
  • Stop Market: A market order combined with a stop loss.
  • Post Only: Your order only enters the market when it can be filled. This ensures you get a maker rebate.
  • Hidden Order: This is a large order broken into several smaller orders to hide its true volume.

Block trades 

Block trades are futures or options, or a combination of both. You order them in multiples, hence the term blocks. 

A Deribit block trade must have a minimum of 25 BTC contracts or an equivalent total value of $200. While for ETH, the minimum is 250 contracts or an equivalent of $100. 

The minimum tick size for both BTC and ETH is 0.0001. 

Margin and leverage

The site lets you use equity to trade at leverage many times higher than the funds you hold. The maximum is 100 times for both BTC and ETH, which is better than most exchanges.

Cross-margin auto leverage sets the limit. For instance, for a 1 BTC position at 10x leverage, you need to hold at least 0.1 BTC. Or, in other words, you only require a 1% initial margin.

The higher you leverage, the higher the potential reward, but also the potential loss. Fortunately, you won’t lose more than your initial investment because Deribit terminates your order if you run out of margin funds. 

Demo account

If you’re new to trading, you can open a demo account at Test.Deribit.com to gain some experience. It has all the functionality of the real Deribit exchange but without using real-world currency

Security

The Deribit platform is one of the most trusted of its kind on the web. It has had no major security breaches, and when a small hacking did take place, it honored what was owed. 

The verification process ensures everyone’s trading is legitimate. Furthermore, the site uses encryption to protect your personal data, and you can opt to use two-factor authentication to add an extra layer of security when logging in.

Cold storage supports 99% of all cryptocurrency held in your wallet. This means the hardware itself is physically secure. In this case, in multiple vaults and bank safes. As a result, your funds are still safe even if hacking was to take place. 

Whether you’re trading Deribit futures or other options, the company’s insurance fund ensures profitable traders get paid even if other traders are liquidated and bankrupt.

Taxes

You can use third parties like CryptoTaxCalculator.io to work out your Deribit taxes, what you may owe and any concessions available.

Until you convert back to fiat, tax is not usually due on cryptocurrencies. Then, profits can sometimes be treated as trading income in some countries, but they typically incur a capital gains tax.

High-volume traders need to make themselves aware of their local tax laws.

Deribit Fees

There’s no Deribit withdrawal fee. Making a deposit is also free. The only charge that applies is the usual network fee that applies to all Bitcoin or Ethereum transactions.

Your Deribit trading fees depend on the type and volume of trading you’re carrying out:

  • Options Contract Maker and Taker Fee: 0.03% or 0.00003 BTC/ETH per contract. Options fees can never reach more than 12.5% of the options price.
  • Futures Delivery Fee: 0.025%
  • Options Delivery Fee: 0.015% but never higher than 12.5% of the option’s value.
  • BTC Perpetual & Futures Liquidation Fees: 0.5%, (0.5% for maker orders and 0.45% for taker orders will be added to the insurance fund).
  • ETH Perpetual & Futures Liquidation Fees: 0.9%, (0.9% for maker orders and 0.85% for taker orders will be added to the insurance fund).
  • Options Liquidation Fees: 0.19% of the underlying asset or 0.0019 BTC per options contract (0.16% of the underlying asset, or 0.0016 BTC per contract is added to the insurance fund).

Deribit Mobile App

The Deribit app is available for those on the go or who don’t wish to use their desktop or mobile browser. You can find it on both the official Apple Store and Google Play Store, where it has a 3/5 and 3.6/5 rating, respectively. 

However, the number of Deribit reviews for the apps is low, and desktop is still the more popular and reliable solution.

The apps provide full functionality, allowing you to view your order book, the markets and charts, carry out orders, and manage your futures and options positions.

You also get settings for notifications and order sounds and the option to login via fingerprint. 

The layout is intuitive and works well, though the larger your display, the easier it will be to see the data. Flipping to the landscape will help in most cases. In short, you should have no trouble navigating around the app and trading. 

If you are very active or let it run in the background, you will drain a lot of data. Users without an unlimited plan, or no WiFi might find this an issue.  

Deribit Customer Support

Writing this Deribit review, I found the site offers an extensive knowledge base covering contracts, technical info, and API documentation for developers. There are also educational courses that teach the basics of trading with written and video tutorials.

If you need to contact a support agent directly, you can use email or a ticketing system from within your account. In addition, 24/7 instant messaging is available via the Telegram platform.

Deribit Alternatives

Deribit is not the only platform to offer crypto trading. Let’s explore which comes out on top when comparing Deribit vs Binance and Deribit vs Bybit

Deribit vs Bybit

Bybit launched in 2018, making it one of the newer crypto derivatives platforms. Since then, it has skyrocketed a strong user base and huge daily trading volume thanks to several features.

Firstly, it has the edge over Deribit when it comes to the supported cryptocurrencies. Besides BTC and ETH, it offers: EOS, Bitcoin Cash, LINK, Litecoin, Tezos, Cardano, Polkadot, Uniswap, Aave, Sushi, XEM, Ripple, and Dodge

Bybit is also less strict on account verification, though it still does not permit users from the United States like Deribit.

Furthermore, Bybit supports fiat deposits and the direct market purchase of Bitcoin, Ethereum, and USDT (a stablecoin that has a linked exchange rate with the USD). You can do this with Visa and Mastercard, which is a massive plus.

Both exchanges have similarly high leverage of 100x, low transaction fees, insurance, API access, and mobile apps. Traders use Bybit’s app more often and rate it higher, though. Over 56,000 users rate it 4.9 out of 5 on Google Play.

When it comes to fees, Bybit is also more attractive, offering a flat maker rebate of 0.025% and a taker fee of 0.075%.

Yet Bybit has less of a track record in security because it hasn’t been around as long. Nonetheless, it claims to hold funds in cold wallets to protect users’ funds from potential attacks. 

In conclusion, Deribit is certainly a robust and stable platform for Ethereum and Bitcoin derivatives, as many Deribit reviews agree. However, Bybit wins out with its wider variety and fiat support.

Deribit vs Binance

Binance stands out with its support of fiat deposits. You can do this by card or bank transfer. And as we mentioned earlier, Deribit is yet to implement such a feature. 

Likewise, Binance supports over 251 cryptocurrencies. And, although around 30 are available for full purchase and trading, Deribit only accepts Bitcoin and Ethereum, giving Binance a clear advantage.

Where Deribit excels is its superior fee structure. Binance charges a maker/taker fee of 0.10% and a withdrawal fee for each cryptocurrency. For example, to withdraw Bitcoin, you will lose 0.0005 BTC in the process. Deribit does not charge for withdrawal, and Deribit fees for trading are at least a decimal lower. 

Furthermore, Deribit gives up to 100x in leverage compared to Binance’s 20x.

Both exchanges offer robust and secure trading platforms for derivatives, but Binance has more highly received mobile apps. It also has the upper hand by providing a dedicated service for users in the United States. Meanwhile, there is no Deribit USA site. 

Deribit only has a few months on Binance when it comes to launch date (2016 vs 2017), and though Binance has suffered one hacking, it compensated its users. 

Both use cold storage to secure funds and two-factor authentication to protect accounts. Similarly, both have a strict verification process, disallowing anonymous accounts.

If you are a serious derivatives trader that favors Bitcoin or Ethereum, Deribit makes more sense because of low fees and high leverage. Yet, overall, Binance is more beginner-friendly and provides comprehensive crypto and fiat support. 

Verdict

To conclude this Deribit review, it’s clear the platform is one of the leading options out there for experienced crypto derivatives traders. From Deribit BTC options to Deribit ETH futures, the trading possibilities are limited but top-notch. And with high leverage and low fees, it’s a no-brainer. 

The platform also has robust customer support options, educational materials, and a long-proven record of excellent security.

However, despite being one of the first to launch, Deribit now falls behind several other exchanges that accept fiat deposits and offer more altcoins. Maybe the exchange will soon catch up, expanding to match the liking of more diversified investors.

FAQ

Is Deribit regulated?

Yes, Panama laws regulate Deribit as a corporation. Where applicable, Deribit also follows the local laws of its supported user base. For example, certain countries require higher levels of users’ personal information, which is the ‘Know Your Customer’ (KYC) requirement.  

The platform bans users from certain countries or governing jurisdictions because of difficulties with local regulations. This includes the United States and Ontario, Canada. Therefore, Deribit reviews mentioning US support are out of date.

Where is Deribit located?

Deribit is located in Panama City in the country of Panama. Original Dutch parent company Deribit B.V., registered it as a subsidiary corporation, DRB Panama Inc.

The company also has important server infrastructure located in London, UK, for their client-hosted solutions.

Can you use Deribit in the US?

No, strictly speaking, if you are located in the United States, it’s against Deribit’s terms of service to use the platform. This is because of the USA’s tight regulatory rules for cryptocurrency exchanges and related services.

A look at user Deribit reviews reveals that some US residents are flouting the rules and still using Deribit. Users provide misleading personal details and utilize a proxy or VPN service to make it look like they’re accessing the site from another country.

You risk an account ban if using this method. It’s also much more difficult since the introduction of ID documents. Under the KYC system, Deribit even reserves the right to immediately liquidate your open positions if you access the site from the United States.

How does Deribit make money?

As noted in this Deribit review, the company makes its money by charging numerous fees for carrying out transactions via its exchange. In essence, it takes a small commission for every movement, so it does not have to charge membership, deposit, or withdrawal fees. Furthermore, some of its own holdings will also be in fiat and interest-bearing.

ABOUT AUTHOR

A qualified journalist and longtime web content writer, Keelan has a passion for exploring information and learning new things. If he's not writing or pushing his own brands, you'll find him watching pro wrestling or trying not to rant about politics online.