How to short sell Bitcoin

A lot of people ask me if it is also possible to profit from a decline in price for bitcoin. The simple answer is yes and in the following text I will explain how to do it.

Personally I consider myself a person that wants to profit from bitcoin moving up AND down. I do not necessarily want to own and bitcoin. I just want to profit from the price movement. The best way to earn when a price declines is by shorting.

What is shorting?
I am sure you heard a lot about people shorting stocks etc and the same is possible with bitcoin. Basically to short a equity you borrow it and then sell it right away. Now in the best case the price declines and you buy back the equity at a lower price and simply return it to the broker. The difference is your profit.

Here is a simple example:
Bitcoin is priced at $4300. You borrow it and immediately sell it for $4300. Now if your trade goes as planned and it drops to lets say $3700 you can cover your position and buy back bitcoin at the new price of $3700. You return the borrowed coins and keep the profit of $600 per coin.

The best part is you don’t have to worry too much about technicalities. The broker does it for you. You just have to make the trade and either you take a long ( you think the price will go up ) or short ( you think the price will go down) position with a trusted broker such as Etoro or Plus500.

Be the first to comment on "How to short sell Bitcoin"

Leave a comment

Your email address will not be published.