While bitcoin and other cryptocurrencies have made astronomical gains so far this year, up more than 1,400% te 2018, that hasn’t stopped many investors from remaining skeptical about the long-term strength of the industry. Ter fact, spil prices climbed higher and higher, crossing big price milestones very quickly, some analysts predicted that a bubble speelgoedpop is approaching. For those investors who believe that bitcoin is likely to crash at some point te the future, shorting the currency might be a good option. Here are some ways that you can go about doing that.
[ Bitcoin futures take cryptocurrency trading to a fresh level, but before diving te, it’s significant to know how wij got to this point. The world of cryptocurrency is complicated which is why Investopedia Academy created Cryptocurrency for Beginners. With extensive explanations of blockchain, Bitcoin and how to operate te the cryptocurrency sphere, it is the ideal way to build the skill you need to start intelligently trading cryptocurrencies. Check it out today! ]
One of the easiest ways to brief bitcoin is through a cryptocurrency margin trading podium. Many exchanges permit this type of trading, with margin trades permitting for investors to “borrow” money from a broker te order to make a trade. It’s significant to recall that there may be a leverage factor, which could either increase your profits or your losses. Many Bitcoin exchanges permit margin trading at this stage, with BitMex, AVAtrade, and Plus500 spil some popular options.
Bitcoin, like other assets, has a futures market. Te a futures trade, a buyer agrees to purchase a security with a contract which specifies when and at what price the security will be sold. If you buy a futures contract, you’re likely to feel that the price of the security will rise, this ensures that you can get a good overeenkomst on the security zometeen on. However, if you sell a futures contract, it suggests a bearish mindset and a prediction that bitcoin will decline ter price. According to the Merkle, “selling futures contracts is an excellent way to brief bitcoin.” Futures markets are somewhat more difficult to find, but OrderBook.netwerk has bot known spil a place to buy and sell bitcoin futures.
Binary Options Trading
Call and waterput options also permit people to brief bitcoin. If you wish to brief the currency, you’d execute a waterput order, very likely with an escrow service. This means that you would be aiming to be able to sell the currency at today’s price, even if the price drops zometeen on. Binary options are available through a number of offshore exchanges, but the costs (and risks) are high.
Prediction markets are another way to consider shorting bitcoin. They have not bot around ter the cryptocurrency world for long, but they can nonetheless be an asset for shorting currencies like bitcoin. Thesis markets permit for investors to create an event make a wager based on the outcome. You could, therefore, predict that bitcoin would decline by a certain margin or percentage, and if anyone takes you up on the bet, you’d stand to profit if it comes to pass. Predictious is one example of a prediction market for bitcoin.
Short-Selling Bitcoin Assets
While this might not appeal to all investors, those interested te buying and selling actual bitcoin could short-sell the currency directly. Sell off tokens at a price that you are convenient with, wait until the price drops, and then buy tokens again. Of course, if the price does not adjust spil you expect, you could also either lose money or lose bitcoin assets ter the process.