What is shorting crypto?

Shorting, or short selling, is a form of trading where an investor seeks to make a profit when the value of an asset, such as Bitcoin, falls. Shorting crypto is an exciting, although risky strategy capable of generating profits. This guide will explain how to short cryptocurrency on leading exchanges including Binance, Coinbase and Kraken.

Can you sell short on a crypto exchange?

Derivatives such as options or futures can give you short exposure, as can margin facilities available on certain crypto exchanges. The price of Bitcoin is volatile and prone to sudden increases or decreases. Selling short is risky in any asset, but it can be particularly dangerous in unregulated crypto markets. 1. Margin Trading

Should a crypto investor go short?

Going short is risky. It is possible that the price of a crypto coin suddenly rises after the investor just sold the coins, hoping to buy them back at a lower price later. At that moment, the investor would have been better off going long, because now he is making a loss by buying back the coins at a higher price.

Is short selling crypto a good idea in a downturn?

Every cryptocurrency’s price is dropping, so anyone buying coins and hoping they’ll rise in price is likely to be disappointed in the short-term (hopefully the long-term picture looks better). However, even in a downturn where everything is pretty much falling, there is at least one way of turning a quick (ish) profit: short selling crypto.