Short bitcoin
If you want to take the risk, this is how you can short bitcoin.

In the last 2 month bitcoin has sore to the sky to almost $20,000 on its best, and than went back and than crashed back almost to $10,000, thus losing almost 50% from its highest pick.

This rollercoaster is just a small demonstration of the risk traders are taking in the cryptocurrency trading market.

Now more than ever, there are more professional traders that are trying to take advantage of this volatile market.

All the options to short in common markets are becoming available in the bitcoin market”

The option to short bitcoin were  up until now mostly through unregulated exchanges. In addition it hasn’t exactly been a good year for bitcoin investors who tried to short it, rising more than 10 fold in its price. But, for those among you that are brave enough to try, and think you have a chance betting against bitcoin, here I will explain the different ways to bet against bitcoin’s rise.

Bitcoins price compared to the USD (Coinmarketcap)

Bitcoins price compared to the USD (Coinmarketcap)

“Always assess your risk wisely, and don’t take impulse decisions. “

The co-founds of market tracker CryptoCompare said – “All the options to short in common markets are becoming available in the bitcoin market”. “There’s pretty good liquidity for shorting bitcoin. The main difference with shorting the Nasdaq for example, is it will be a lot more volatile, so there’s a lot more risk. The rate to borrow will also be a bit higher.”

Margin Trading:

One of the easiest ways to short bitcoin ts through a cryptocurrency margin trading platform. There are different exchanges that allow this type of trading. Bitfinex, one of the biggest cryptocurrency exchanges, requires an initial equity of 30 percent of the position. You have to remember, when you trade in such a way, there may be a leverage factor, which might increase your profits or you losses. Always assess your risk wisely, and don’t take impulse decisions.  

Contracts for difference:

One easiest and most popular ways to short bitcoin is through contract for difference or in a more simpler way – CFDs. A CFD is a contract between the client and the broker, where the buyer and seller of the CFD agree to settle any rise or drop in the prices in cash on the contract date.  

In other words, it is a contract between the buyer and the seller, there is an arrangement that the seller will pay the buyer the difference between the current value of tan asset and its value at the contract time.

“CFD is currently a great market if you want to short bitcoin, especially ahead of that milestone 10K mark, which we think will bring some retracement,” said Naeem Aslam, a chief market analyst at TF Global Markets in London, which offers the contracts.

Borrow to short bitcoin

Most of the brokerages that allow margin trading will also let investors to borrow bitcoin to short with no leverage. This is a less risky way to bet that bitcoin prices will fall.

Shorting Bitcoin ETNs

Traders can also bet against bitcoin indirectly.  By shorting exchange traded notes with exposure to the cryptocurrency, like Stockholm based bitcoin tracker one, and grayscale investments LLc’s bitcoin investment Trust. Exposure won’t be perfect so there is always the risk that those notes dont always trade in line with bitcoin.

“New and better ways might take place in order to short bitcoin, as more and more people are becoming interested in this option.“

New and better ways might take place in order to short bitcoin, as more and more people are becoming interested in this option.