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To Short Bitcoin or Not to Short?

How to short BTC
Many people choose to make money with Bitcoin. Usually they just buy the currency and save it. But there is another, less common way. It is called shorting.

Shorting Bitcoin is betting on falling stocks. At its core, the procedure is simple: first, a trader borrows them with the expectation that the value is about to fall. Then he sells quickly. In order to "win back" the borrowed, he purchases the same number of shares. If their price goes down, the trader stays in the black.

The benefit is the difference between the original value of the stock, when the person borrowed and then sold it, and the changed value. That is, the trader returns his debt at a lower price.

But, if their cost rises, the person will go into a minus. This is the main risk of shorting, as stocks often go down and then rise sharply.

How to short Bitcoin?

Bitcoin shorting occurs through a derivative contract - a financial transaction, the value of which is determined by the value of the specified currency at the moment. The best-selling contract today is considered to be a contract where the price of a cryptocurrency is tracked in relation to the US dollar.

Attention! Buying bitcoin doesn't make you the owner of the underlying asset! This means that its cost affects your financial situation.

More advanced traders often resort to derivatives. They allow you to increase the profit from the transaction. One of these is leverage, when income is increased due to borrowed money. But this also increases the risk. This can be seen in the following example:
  1. One bitcoin sells for $ 800. You have this amount. If the price of the currency rises by 10%, your profit will increase accordingly. The same will happen with a decline.
  2. You use all your funds to enter into a derivative contract that allows you to use 10x leverage. This means that you will have 7 more bitcoins in your hands for a total value of $ 7,000.
  3. If the value of bitcoin increases by 10%, then the profit will be equal to 100% of the total amount. But, when the price of the currency begins to gradually approach the zero position, the exchange will liquidate bitcoin, and then you will lose all your money.
As a rule, the exchange blocks borrowed funds in 80% of cases. The value of a position at which it will be liquidated can always be specified. But no one will give you a 100% guarantee. The same applies to a short position. Here, by the way, leverage is rarely used. So, if your goal is a small profit and a minimum of risk, then it is better to do without borrowed funds, and use only the cryptocurrency received for your own money. Do you want maximum benefits and don't worry about risks? In this case, you can apply leverage by checking the limit with the exchange in advance. Now many people make money through shorting. In fact, this is a matter of practice. If you are shorting for the first time, then it is better to stock up on reserve finances in case of a loss.

Where can you short Bitcoin? service allows you to buy and sell bitcoin as quickly as possible and without additional problems. This is the most convenient way for residents of Ukraine. The exchange is carried out in several ways - through debit cards and in cash. As well you can buy bitcoin with cash in Ukraine.

The site provides the most favorable exchange rate for Ukrainian citizens, and also guarantees the complete security of all financial transactions. In case of any problems, you can contact the support service.

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