For those investors who trust that bitcoin is probably going to crash at some point later on, shorting the currency may be a decent choice. Here are some ways that you can approach doing that.
One of the easiest ways to short bitcoin is through a cryptocurrency margin trading platform. Numerous exchanges permit this kind of trading, with margin trades taking into account investors to “borrow” cash from a broker so they can make a trade. It’s important to recall that there might be a leverage factor, which could either increase your profits or increase your losses. Numerous Bitcoin exchanges permit margin trading at this stage, with Markets.com and AvaTrade as some well known options.
Bitcoin, as any other assets, has a futures market. In a futures trade, the buyer agrees to purchase a security with an agreement which specifies when and at what price the security will be sold. In the event that you purchase a futures contract, you’re probably going to feel that the price of the security will rise; this ensures you can get a decent deal on the security later on. Nonetheless, in the event that you sell a futures contract, it suggests a bearish mindset and an prediction that bitcoin will decrease in price.
Binary Options Trading
Call and put options also enable individuals to short bitcoin. On the off chance that you wish to short the currency, you’d make a put order, most likely with an escrow service. This means you would plan to have the capacity to sell the currency at the present price, regardless of whether the value drops later on. Binary Options are accessible through various offshore exchanges, however the costs (and the risks) are very high.
Prediction markets are another approach to consider shorting bitcoin. They have not been around in the cryptocurrency world for long, yet they can be an asset for shorting currencies like bitcoin. These markets take into consideration investors to make an occasion make a bet based on the result. You could, in this way, foresee bitcoin would decrease by a specific margin or rate, and in the event that anybody takes you up on the wager, you’d stand to benefit on the off chance that it comes to pass.
Short-Selling Bitcoin Assets
While this may not be suitable for all investors, those interested in purchasing and selling bitcoin could short-sell the currency straight away. Sell off tokens at a value that you are OK with, hold up until the point that the value drops, and afterward purchase tokens once more. Of course, if the cost does not adjust as you expect, you could also either lose cash or lose bitcoin assets in the process.
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