Can one short bitcoin?
One of the theories behind bitcoin’s price rise is that it cannot be shorted. However, we believe this to be incorrect. Investors can short bitcoin on the digital asset exchange, BitMEX. Approximately, $1 to $2 billion of notional bitcoin trades daily on BitMEX.
There are number of ways to short bitcoins
Shorting of bitcoins is currently done through unregulated exchanges. However, given bitcoin’s huge volatility, shorting becomes a risky affair. Nevertheless, there are few options available to bet against the digital currency’s rise.
Contract for differences
Contract for differences (or CFD) is one of the most popular options to short bitcoins. CFD is a contract between a buyer and a seller. Both parties to the contract agree to settle any rise or fall in prices in cash on the contract date.
Bitcoin (ARKW) can be shorted through a margin trading platform provided by websites such as BitMEX, AvaTrade, and Plus500. In margin trading, users can borrow money from a broker for trading.
Bitcoins can also be shorted on the following platforms:
- Bitfinex, a Hong Kong–based bitcoin exchange, allows bitcoin users to act like brokers and loan bitcoins for trading.
- ICBIT, a trading website, allows users to make bets at a future date at a predetermined price. The platform also allows commodities (GSG) trading in bitcoins.