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.

Platforms Compete for Market Share

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 Zhou 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.

BitMEX Melts Down

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.

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