Deribit Review 2021: Futures and Options exchange

As it states on its website, Deribit is an answer to those in search of a professional, reliable, and trustworthy platform focused on cryptocurrencies futures and options. It offers up to 100x leverage when trading bitcoin futures and also provides options via perpetual contracts in Bitcoin and Ethereum.

Founded in 2016 by three technology and crypto enthusiasts, the company claims to have integrity, quality of service, and innovation as its core values. It looks certain as the interface is well designed and the platform is reliable with a low rate of slippage.

But is it enough to make an investment decision? Certainly not. Stay with us in this Deribit broker review and we will walk you through all the details you need to know before deciding to open or not an account with this broker.

What and who is Deribit

As mentioned in its website, Deribit operated under the umbrella of DRB Panama Inc, a corporation registered on 11 September 2019 in Panama City. It works under the registration number of 155684990.

The Cryptocurrency Futures and Options Trading was founded in 2016 as an Amsterdam-crypto based company. However, the platform decided to move to a more crypto-friendly country such as Panama early in 2020. Deribit now has a daily trading volume of over 24,700 BTC or around $220 million, according to CoinMarketCap.

What does Deribit do

Deribit is a derivatives market platform that is focused on futures and options for Bitcoin and Ethereum, which means that it is built for margin traders that work with leverage trading.

The platform only accepts deposits through Bitcoin, which can be used to trade the same Bitcoin and Ethereum against the US Dollar. The platform is not regulated.

The Deribit Team

Deribit was founded by John Jansen, a Bitcoin enthusiast who worked as a trader in the Amsterdam Exchange market, Marius Jansen, current CMO, and Sebastian Smyczýnski, CTO. Other key players in the Deribit team are Lead developer Andrew Yanovsky and CCO Luuk Strijers.

Is Deribit Legit?

Deribit has no credentials from any regulated body; however, it is a usual practice in the cryptocurrency industry. The platform works under the laws of the Republic of Panama after leaving the city of Amsterdam in the middle of regulatory complaints against the European Union rules.

According to its website, Deribit is part of “DRB Panama Inc, a corporation incorporated under the laws of Panama, registered at the (Mercantile) Record No 155684990 on 11 September 2019, Panama City, Republic of Panama.”

Security

Deribit believes in privacy and anonymity. The platform does not require verification while creating new accounts, so users only need to register and open an account, and they can start funding their accounts right away. However, starting in February 2020, the exchange provides, and requires, KYC validation for certain operations.

On the other hand, security measures include cold wallets for 99% of deposits, multiple bank safes, and customer support that enhance the numerous defense layers. The platform is offered in English, Chinese, Korean, Japanese, and Russian.

Authentication

Deribit uses two-factor authentication and IP pinning that provides additional security in case a user changes an IP address during a session. In that case, the session would be terminated immediately.

Support

Deribit does not offer great ways to be contacted. The Frequency Answered Questions or FAQs page is minimal, and the security description is not too detailed. The platform has a Contact us page with dedicated emails to different kinds of necessities and fields of action.

They also have a Telegram account where they group all its community where they share everything and solve any question.

Licence

As mentioned before, Deribit has no licenses from any regulated body like many other crypto exchanges. However, it works under the Panama surveillance as an incorporated firm under the umbrella of DRB Panama Inc and registration at the (Mercantile) Record No 155684990 on 11 September 2019.

Supported and restricted countries

Deribit accepts clients from most countries in the world except the United States, Canada, and Japan as the most important.

Restricted countries:

• Canada (province Quebec);
• Guam;
• Iran;
• Iraq;
• Japan
• Democratic People’s Republic of Korea;
• Panama;
• Puerto Rico;
• Samoa;
• Sudan;
• Syrian Arab Republic;
• United States;
• Virgin Islands (U.S.).

Supported countries include the United Kingdom, France, Canada, Japan, China, and Brazil among others. It is important to note that Deribit doesn’t allow VPN trading.

Deposits and withdrawals

As mentioned previously, Deribit only accepts Bitcoins for deposits and withdrawals. The process is easy in both ways, simply log in to the account and get the deposit address and/or QR code — the same for withdrawals.

Deposits don’t have a fee, but withdrawals do have, and it will depend on the priority you select. It will be calculated after the details have been filled out.

How to trade on Deribit?

As Deribit accepts no fiat currencies and you can only make deposits with Bitcoin. The first rule to trade on this platform is to have Bitcoins. The second rule is to have a wallet. Let’s explore how you can invest in digital currencies in the Deribit trading ecosystem.

Trading pairs

Deribit offers trading in futures and options for Bitcoin and Ethereum against the US dollar. You can trade perpetual contracts for BTC/USD and ETH/USD, and options for ETH and BTC.

Go short and long while trading with Deribit

Traders are allowed to open positions in both, long and short directions. However, keep in mind that trading is with contracts and options.

Leverage levels

Deribit offers leverage on all its products, but the level depends on the product. While trading BTC Futures, you will be able to take advantage of up to 100x leverage. On the other hand, options investments offer up to 10x leverage.

According to the website, “the leverage you are trading with depends on the equity you have in your account.” The platform uses cross-margin leverage calculated automatically, so in terms of trading a market you will have to comply with the requirements for certain leverage levels.

That being said, you can use sub-accounts with different levels of leverage.

What type of contracts does Deribit offers?

Deribit offers perpetual and traditional future contracts as well as options trading for Bitcoin and Ethereum against the US Dollar.

Deribit perpetual contracts are derivative products similar to the traditional future but with no expiration date. Traders can hold the position as long as they like. It tracks the underlying index price, so it trades like spot.

Usually, the Bitcoin contract size is 10 USD, and 1 dollar represents an index point. The Ethereum contract is 1 USD, while 1 dollar represents one index point.

Future contracts by Deribit: A future contract is an agreement to buy or sell an asset at a predetermined price and date in the future.

Options by Deribit: As its website says, Ethereum and Bitcoin “Options traded are so called European style cash-settled options,” so it can not be exercised before expiration, but can only be executed at that expiration.

 Fees

Deribit works with a maker-taker fee model where Bitcoin perpetual and future orders which provide liquidity get a rebate of 0.025%. On the other hand, orders that take liquidity have a trading fee of 0.075%. “The fee is calculated as a percentage of the underlying asset of the contract. ”

However, in the case of options, fees are limited to 12.5% of the price of the position.

BTC Perpetual + Futures

• Maker Rebate: 0.025%
• Taker Fee: 0.075%

ETH Perpetual + Futures

• Maker Rebate: 0.00%
• Taker Fee: 0.05%

BTC and ETH Options

• 04% of underlying or 0.0004 BTC/option contract
• 04% of underlying or 0.0004 ETH/option contract

There are other fees such as settlement at expiration, liquidation trades on BTC and ETH, and Deposits and Withdrawals.

• Deposits: No charge
• Withdrawals: The fee depends on the current state of the Bitcoin network

Deribit Testnet account

Deribit provides users with a live Testnet platform where they can know the platform, test new strategies or just play around. After signing up with the paper trading account, you will be able to trade in the demo account with 10 BTC, also demo funds.

Deribit Bonus and Referral code

Unfortunately, Deribit does not offer any promotion or welcome bonus; however, there are two options to get some kind of discounts while trading with Deribit: Affiliate link and referred options.

How can I benefit from the Deribit referral link

Check out our dedicated page to the Deribit Coupon and Referral Code. All the information are here.

What bonus do you get with a Deribit Invitation code?

People who open an account in Deribit via an invitation code will get discounts in all contracts during the next six months following the date of the opening of the account. As mentioned above, the discount is 10% on fees from perpetual and futures contracts, as well as option trading.

Conclusion: Easy going exchange to trade Contracts and Options

Deribit is a good and easy to use platform for beginner traders. Still, it also allows experienced traders to test strategies and bet on perpetual and traditional futures contracts but also options.

The platform has a good offering of software partners that offer a variety of bots, robots and strategies.

The fee scheme is easy to understand and transparent. Unfortunately, the platform doesn’t offer promotions. But one important topic is that as unlike other brokers, Deribit supports other languages than English.