3 Ways to Short Bitcoin to Profit from Crypto Correction

The long-lasting sideways phase of Bitcoin and the entire crypto market has now turned into a severe correction. Bitcoin is no longer struggling to reclaim $40,000 but is looking for its bottom towards the $30,000 level. You can find out here how you can still benefit if you bet on short positions.

Bitcoin shorting with bitcoin futures

Bitcoin Futures, also known as “futures contracts”, offer the opportunity to place bets on the Bitcoincourse to complete. One agrees with a contractor that one will pay him or her at a future date Bitcoin (or others Assets) to a specific course sold.

One Futuresshort position arises when you sell the futures contract. The seller guarantees that he will deliver the BTC (or satoshis) at the current price on the agreed date. He assumes that the course until then falls. Is that Bitcoincourse under the course at the start of the agreed period of time, the seller rakes in profits.

A distinction is made here between the conventional ones Bitcoin Futures and the physically backed. In the case of the latter (known for example from futures-provider Bakkt) are also included for each contract Bitcoin “physically” deposited. With the conventional ones Bitcoin Futures (Chicago options exchanges CME and CBOE) this option falls flat.

Contracts for difference: Contract for Difference (CFD)

If this is not risky enough, you can try contracts for difference. Here, two parties agree to exchange a performance for interest payments. You have to have a security (margin) deposit.

The buyer of a contract for differences agrees to pay the seller the difference between the current Bitcoincourse and prophesied to him for the future Bitcoincourse to pay. Similar to the Bitcoin Futures, a future date is also agreed here. With CFDs it is not necessary to Bitcoins also actually possess, here only the Bitcoin-Course developments or their differences are traded.

However, there is not only the risk of total loss. Rather, there are still so-called “obligations to make additional payments”: If the bet turns out unfavorably, you have to add more. for private investors however, these additional payment obligations no longer apply. Is with these the margin however, when used up, the CFD platforms must close the open positions immediately.

By the way: eToro offers you CFD trading the opportunity to bet against bitcoin.

Bitcoin shorting with synthetic assets

If you like it a little more complicated, you can use the Synthetix network deal with This decentralized platform offers the possibility to create synthetic representations of assets. They are then traded there as so-called “Synthetix”. This form is also available as “inversion”, i.e. the opposite course movement. at Bitcoin the inverse would be called synthetic asset i.e. iBTC. sinks the Bitcoinprice, iBTC rises. (By the way: Like the Synthetix platform and related cryptocurrency We explain how it works in detail in the BTC-ECHO Magazine from February 2020.)

Here is a list of our partners, some of them too Bitcoin Offer shorting.

Caution: Bitcoin Shorting, like investing in the crypto market, is associated with high risks and needs to be carefully considered. These lines do not constitute a buy or sell recommendation or investment advice.

Disclaimer

This article was previously published in March 2020 and has been reviewed and adjusted accordingly for re-publication.

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