Undoubtedly, Bitcoin has become the king of cryptocurrencies. BTC shows itself to offer up great returns; however, it’s not always a profitable investment.
Now, due to the volatility alone, it’s one of the most dangerous investments you can make.
Majority of investors considered whether or not it’s time to get out of the cryptocurrency world.
However, most of the investors wondered how they could max out of profits from cryptocurrency.
Now if you are looking a way to leave Bitcoin world then here comes the Short-Sell Bitcoin at a profit.
So, are you wondering how to do this? Here we’ll show you some of the easiest ways to short Bitcoin and pocket the rewards.
What is Short Selling?
Basically, short selling is an investment method which helps you to make money when an asset’s price goes drop. Shorting works on a principle where you borrow an asset, such as Bitcoins, and then sell it at its current price. Later on, you again purchase the Bitcoins to pay back the person or company you borrowed them from. Confidently, when you go to repurchase the Bitcoins, the price of a BTC will drop, which will be cheaper to purchase the assets that you need to pay back.
How to Short Bitcoin
With the extreme volatility and the downward trend of BTC attract many investors wondering how to make money from its potential collapse. Now, if you want to short Bitcoins, you need to contact a trading agency or a platform and place a short sell order. The agency will then sell the BTC from their own supply, and assume in the future that you’ll repay them with an equal number of Bitcoins. Whether the price will drop or rise you have to pay an equal amount of Bitcoins which you have borrowed from the agency or a platform.
Here we have mentioned some of the ways with which you can go with for Shorting Bitcoins.
Direct Margin Trading
Margin Trading platform like delta.excahnge, is one of the easiest ways to short Bitcoins. Majority of exchanges offers this type of trading, with margin trades allowing investors to “borrow” money from a broker to make a trade. Furthermore, always remember that there may be a leverage factor, which can either increase your profits or your losses. Many Bitcoin exchange platform which allows Margin trading including, BitMex, AVATrade, and Plus500 are some of the options.
Assets like Bitcoins has a futures market. In a future trade, a buyer agrees to a contract to purchase security which specifies when and at what price security will be sold. Moreover, if you buy a futures contract, most probably you’ll feel that the price of the security will rise; this will ensure that you can get a good deal on the security later on.
But, if you sell a futures contract, it suggests a cranky mindset and a prediction that bitcoin will go down in price. According to the Merkle, “Selling future contracts is an excellent way to short bitcoins.” Undoubtedly, futures markets are somewhat more difficult to find.
Binary Options Trading
You can call and put options also allows people to short Bitcoins. Now if you wish to short the currency, you would execute a put order, probably with an escrow service. This means that you’re aiming to sell the currency at today’s price, even when the price goes down later on. Moreover, binary options of trading BTC are available via many foreign exchanges; however, the costs, as well as risk, are still high.
The next way in which you can consider shorting Bitcoin is Prediction Markets. Primarily, the prediction markets have not been around in the cryptocurrency world for a long time. However, it can nevertheless be an asset for shorting Bitcoins like cryptocurrencies.
“The prediction market mainly allows investors to create an event making a wager based on the outcome.” You can predict that bitcoin will decline by the certain margin or percentage, and if anyone takes you up on the bet, you will stand to profit if it comes to pass. One of the examples for prediction market for Bitcoin is Predictions.
Short-Selling Bitcoin Assets
While this might not appeal to all investors, those who are interested in buying and selling bitcoin could short-sell the currency directly. You can sell the token at the price that you’re comfortable with, you can wait until the price drops, and you can buy token again. Now, if the price doesn’t adjust as you expect, you might lose the money or lose bitcoin assets in the process.
The Conclusion – Should you Short Bitcoin?
We all know that Shorting Bitcoin is a great process to make money; however, it may be sometimes risky. The act of borrowing bitcoins, lets you selling the BTC when the price is high and then repurchasing them when the cost is low. Even you can earn money when markets are bleeding. Generally, shorting Bitcoin isn’t recommended for traders who have just started because of the high risk.
Now, if you decide to short BTC make sure always to invest money when you can afford to lose. Stay up to date with current related events. This will help you to anticipate any change in the price direction. So, do you’ve any experience with the short selling bitcoin? Let’s discuss in the comment section.…Read More