For those investors who believe that bitcoin is likely to crash at some point in the future, shorting the currency might be a good option. Here are some ways that you can go about doing that.
One of the easiest ways to short bitcoin is through a cryptocurrency margin trading platform. Many exchanges allow this type of trading, with margin trades allowing for investors to “borrow” money from a broker in order to make a trade. It’s important to remember that there may be a leverage factor, which could either increase your profits or your losses. Many Bitcoin exchanges allow margin trading at this stage, with BitMex, AvaTrade, and Plus500 as some popular options.
Bitcoin, like other assets, has a futures market. In 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.
The cryptocurrency Bitcoin made a relatively unheralded entrance in the financial world when it was introduced in 2009. But its profile has risen steadily over the years as more and more people are becoming interested in this alternative form of currency.
Along with the increased interest in Bitcoin has been a rapidly increasing value. After spending much of the first half of 2017 hovering around $1,000, it hit $5,000 in October and breached $7,000 in early November. Now, as of December 2017, it’s hit a new record high, with one Bitcoin valued at $17,450.01 (as of December 14, 2017). (By the way, you should know that you don’t have to own whole Bitcoins to invest in this cryptocurrency. You can buy “fractions” or “percentages” of a Bitcoin.)
Boosters say Bitcoin could reach $25,000 within the next several years. More and more financial institutions are accepting Bitcoin.
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During the first seven months of 2018 the price of bitcoin collapsed 53%—a fall supposedly triggered by concerns over regulation, exchange hacks and a general slowdown in trading.
For most, the decline was a disaster, wrecking small fortunes invested in the burgeoning cryptocurrency market.
For others, the plunge since December 2017 triggered a windfall, conveniently coinciding with the creation of the first mainstream methods of betting against bitcoin.
Bitcoin Futures arrived at the Chicago Board Options Exchange in December. Credit: AP Photo/Kiichiro…
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As the cryptocurrency market develops, new opportunities to take a position on bitcoin are being created. Discover what shorting bitcoin is, why traders are choosing to do it and how you can short-sell bitcoin in four steps.
During 2018, increased regulations and a general slowdown in cryptocurrency trading caused bitcoin (BTC) to shed over 80% of its value – falling from over $17,000 in January to a low of $3152 in December.
2017 was a historic year for cryptocurrencies.
Take Bitcoin as an example.
On January 1st the same year it was trading at around $900.
In May it rose to above $2,000.
In September it just fell shy of the $5,000 price level.