Among more than 600 crypto exchanges, Binance and Bybit are among the top 5 options by trading volume. One of the reasons for their popularity is because they both provide copy trading features which can significantly improve your trading performance. Let’s see how you can use this service to become a better crypto trader.
How copy trading works on Binance and Bybit
Copy trading is basically the ability to mimic another trader’s actions and implement them as your own. However, every platform has a different method of copy trading which makes the difference on which one you choose.
Activating Binance copy trading
The Binance crypto exchange doesn’t offer copy trading services directly for its users. Instead, it provides an API which allows external party apps to connect to Binance’s servers. There are several third party apps which have copy trading services for the crypto market so you shouldn’t be worried about finding one to use with your Binance API.
You can get your API key by logging into your Binance account, clicking on the user centre icon at the top of the page, and selecting API management. Label your API key and then we recommend enabling 2FA (two-factor authentication for added security. This API key can then be copied into a third party app to initiate copy trading.
Some of these apps include WunderTrading and Diabolo with the latter having more trading volume. From there, you can choose from among the listed human traders and computer bots and enable copy trading. Your Binance trading account should then start making trades according to the copied bot or human.
Activating Bybit copy trading
Unlike Binance, Bybit has an integrated copy trading system allowing you to copy from other Bybit traders. All you need is a funded Bybit account and then hover your mouse over the Tools option at the top of the page and selecting Copy Trading. This page will have a list of the top traders ranked by ROI (return on investment) or you can search from the list of over 6k traders.
Because the copy trading service is offered by Bybit itself, you can quickly start copy trading with just a few clicks. Alternatively, you can also request for an API key just like you would with Binance and then follow the same steps as discussed above. Both will function similarly so the choice is really up to you.
Which one is better?
Considering that Bybit offers in-house copy trading, we find this to be the preferable option compared to Binance. An integrated system means that the exchange is able to monitor traders’ activities directly to ensure that the stated returns are accurate. On the other hand, some traders and robots on third party apps may not have the declared returns thus resulting in poor performance.
Moreover, Bybit copy trading is a free service offered by the exchange to enhance users’ experiences. Meanwhile, it may cost between $13 up to $62 per month when using third party services even though performance is not guaranteed. And although these third party apps can’t access your funds through an API, Bybit copy trading is still the safer option.
For crypto copy trading to help you effectively, it’s important that the exchange you’re using has a wide range of markets. And while both Binance and Bybit are primarily crypto exchanges, they also have additional assets you can trade.
Binance has the highest trading volume because it has 382 coins listed and provides 1,673 markets. There is, of course, the straightforward spot trading market that involves exchanging one crypto for another, but there are also derivatives including futures, options, and leveraged tokens. These markets allow you to trade with leverage which can be as high as 20x.
Bybit is no slouch either being the 5th largest crypto exchange and it too has the same list of derivatives as Binance with the same leverage. Only 556 markets are available despite 370 coins being listed, so spot traders may be a bit disappointed. Nevertheless, it means that Bybit copy trading should still be able to elevate your performance.
Since it was launched in 2017, Binance has had some of the lowest crypto trading fees in the industry, which is perhaps why it’s so popular among all traders. Regular users are charged 0.10% in both maker and taker fees. The more you trade, the higher ranked tier you’re placed and the fees keep decreasing up to 0.02% 0.04% for makers and takers respectively.
You can further reduce your trading fees by holding BNB, the exchange’s native token, by 25% on spot trades and 10% on futures trades. This makes Binance one of the most affordable exchanges especially for active professional traders making dozens of trades every other day.
Bybit has followed suit in lowering its trading fees too and now almost matches those charged by Binance at 0.10% for both makers and takers on spot trading. It’s even more competitive on futures trading so it might be preferable if you’re active on this market. Unfortunately, the BNB deduction by Binance might still make Bybit copy trading costlier.
Regulations and risks
While Binance has offices in several cities, CEO Changpeng ‘CZ’ Zhao has often claimed that the company has no headquarters because cryptocurrencies are not centralised. So far, the exchange has been very successful and this ethos doesn’t seem likely to change.
But pressure from regulators such as the CFTC may force it to establish a presence in the US and follow regulations. Despite this, Binance has proven to be very safe as demonstrated by its resilience following a $570 million hack. Most other exchanges could have folded, but Binance has shown that it can withstand any shocks in the market.
Like Binance, Bybit too is facing pressure from various regulators around the world. Some include Japan’s JSA that warned it against operating without a licence and Spain’s CNMV which restricted some of the exchange’s services for its residents.
Fortunately, Bybit copy trading is still available for users from the rest of the world with the exception of the US since the exchange is not registered in the country. You could still technically access Bybit through a VPN, but this is not recommended.