Bybit's 29th Proof of Reserves and the Growing Trust in Centralized Exchange Transparency

The cryptocurrency industry has long grappled with trust issues, particularly following high-profile collapses like FTX and Celsius. Yet, as the sector matures, centralized exchanges (CEXs) are increasingly adopting institutional-grade safeguards to rebuild credibility. Bybit's 29th Proof of Reserves (PoR) report, published on December 24, 2025, exemplifies this trend. With reserve ratios consistently above 100% for major assets and independent verification by third-party auditors, Bybit is setting a new standard for transparency-a critical factor in attracting institutional capital and fostering long-term user confidence.

Reserve Ratios Above 100%: A New Benchmark for Solvency

Bybit's latest PoR report, verified by cybersecurity firm Hacken, confirms that the exchange maintains reserve ratios exceeding 100% across all major assets. As of December 17, 2025, Bybit reported a 102% reserve ratio for USDT, 112% for USDC, 105% for BTC, and 101% for ETH. These figures mean Bybit holds more on-chain assets than user liabilities, creating liquidity buffers that act as a financial cushion during periods of stress. For context, a 100% reserve ratio ensures a 1:1 backing of user assets, while ratios above this threshold demonstrate overcollateralization-a feature traditionally associated with institutional-grade safety.

This approach aligns with academic research emphasizing that CEXs must maintain reserve buffers of 6–14% to withstand adverse events. Bybit's 5–12% overcollateralization not only meets but exceeds these benchmarks, offering a tangible assurance to users and investors. The exchange's monthly PoR snapshots further reinforce this commitment, enabling real-time verification of solvency.

Audit Methodology: Transparency Through Independent Verification

Bybit's PoR process is underpinned by rigorous audit methodology. The December 2025 report, independently verified by Hacken, involved a cryptographic proof system that confirms the exchange's on-chain reserves match user liabilities without exposing sensitive data according to the report. For example, the 102% USDT reserve ratio was validated by cross-referencing user balances (5.9 billion USDT) with Bybit's wallet holdings (6.1 billion USDT) as confirmed by the report. This methodology eliminates the need for self-declared solvency statements, a practice that contributed to past crises.

The role of third-party verification cannot be overstated. Hacken's involvement adds a layer of credibility, as the firm is recognized for its expertise in blockchain security. Bybit's decision to publish these audits monthly-rather than quarterly or annually-demonstrates a proactive stance toward transparency, a trait increasingly demanded by institutional investors.

Institutional Trust and Crisis Resilience

Bybit's reserve strategy has proven its value during crises. In February 2025, the exchange faced a $1.5 billion hack but was able to restore liquidity and maintain solvency due to its overcollateralized reserves according to the report. This incident underscored the importance of liquidity buffers in mitigating systemic risks-a lesson not lost on institutional investors.

Expert analyses further validate Bybit's approach. Yoyee Wang, Bybit's Head of Business-to-Business, emphasized that custody design must prioritize risk management and operational efficiency to attract institutional capital. A 2025 study on CEXs echoed this, noting that transparency mechanisms like PoR are essential for building trust in an industry still recovering from reputational damage as research shows. Bybit's consistent reserve ratios above 100% signal to institutions that the exchange is prepared for black swan events, a critical consideration in risk-averse portfolios.

Bridging TradFi and DeFi: A Regulatory Comparison

While traditional finance (TradFi) operates under centralized reserve requirements set by central banks, Bybit's PoR model introduces a decentralized equivalent. For instance, the exchange's 112% USDC reserve ratio mirrors the liquidity ratios maintained by banks but with the added benefit of public verifiability. This hybrid approach-combining TradFi-like safety with DeFi-style transparency-positions Bybit as a bridge between two worlds.

Regulatory clarity in regions like the UAE has further bolstered Bybit's institutional appeal. As governments worldwide grapple with crypto regulations, Bybit's proactive transparency measures align with emerging compliance standards, reducing friction for institutional onboarding.

Implications for Long-Term User Confidence

For retail users, Bybit's PoR reports serve as a trust-building mechanism. The December 2025 report revealed a shift in user asset composition, with stablecoins like USDT and USDC gaining prominence over BTC and ETH as data shows. This defensive positioning suggests users are prioritizing liquidity and safety-a trend Bybit's reserve strategy directly supports.

Moreover, the exchange's commitment to monthly reporting fosters a culture of accountability. Unlike traditional banks, which disclose reserves infrequently, Bybit's real-time transparency reduces the risk of hidden insolvency, a key concern for crypto newcomers.

Conclusion

Bybit's 29th PoR report is more than a technical exercise-it is a strategic move to redefine trust in centralized exchanges. With reserve ratios above 100%, independent audits, and institutional-grade safeguards, the exchange is addressing the core vulnerabilities that have plagued the crypto industry. For investors, this represents a compelling case for CEXs that prioritize transparency as a competitive advantage. As the sector evolves, Bybit's model may well become the gold standard for balancing innovation with institutional-grade safety.