Top seven Ways to Brief Bitcoin – The Merkle
Top seven Ways to Brief Bitcoin
The vast majority of Bitcoin speculation occurs through long and brief positions across trading platforms. Longing and shorting has been a more favorable solution for most national currencies and assets over the past few years. Bitcoin speculators rely on these same devices to guesstimate how the price will evolve in the coming hours, days, and weeks. Given the current BTC price trend, shorting Bitcoin becomes fairly appealing. Below is a brief list of ways to brief Bitcoin and – hopefully – make a profit while doing so.
#7 Bitcoin Margin Trading
One of the most common ways to brief Bitcoin is by using a cryptocurrency margin trading platform. A lot of major Bitcoin exchanges give users this chance, albeit some specialized trading platforms are worth checking out. By using margin trading, one essentially “borrows” money from a broker to make a trade. Do keep in mind there is also a leverage factor, which can exponentially increase your profits – and losses.
#6 The Bitcoin Futures Market
Another popular option to brief Bitcoin without friction is by venturing into the futures market. A future is a financial contract where a buyer agreed to purchase a security, which is represented by Bitcoin in this case. This security is to be purchased at a future date and a motionless price. In most cases, the person buying a futures contract feels the price per Bitcoin will go up, and they will be able to purchase Bitcoin below the market price when the contract “expires”.
Selling a Bitcoin futures contract indicates a bearish mindset and an expectation of how the Bitcoin price will decline by the predetermined date. Right now, there will be a fair few futures contracts for sale, as the Bitcoin market is in a downward spiral. Selling futures contracts is an excellent way to brief Bitcoin.
#Five Lending To Brief Bitcoin
Several platforms permit users to receive a loan to brief Bitcoin . While this is a rather complicated and lengthy process – including a credit check – it is a fine way to brief Bitcoin. More importantly, clients using such a service will remain anonymous to the public, yet have their identity verified by the company providing the service. For more privacy-centric users, this may not necessarily be the best solution, even tho’ it is worth checking out.
#Four Binary Options Trading
CALL and PUT Options trading is another chance for people looking to brief Bitcoin. People looking to brief Bitcoin would execute a PUT order, preferably using an Escrow service. Traders who feel the price will go down aim to secure the capability to sell Bitcoin at today’s market price, even if a downward trend would occur. Speculators using a PUT option, provide an incentive to potential buyers in the form of an even lower price per Bitcoin than who the speculator hopes to get. For example, if someone wants to brief Bitcoin at the value of US$750, yet wants to secure that price even when the value drops to US$700, they could lodge to sell for US$725 as a “premium”.
#Trio Bitcoin Options
A Bitcoin option is slightly more advanced than its binary option counterpart. A fall in Bitcoin value will earn a profit, which is exactly what shorting Bitcoin is all about. Options permit speculators to bet the value of Bitcoin will be lower by a specific date or how it won’t reach a particular threshold above its current price within a period. Using Bitcoin options can be done through one of the many platforms or speculators can create their own.
#Two Prediction Markets
Even tho’ prediction markets are a relatively fresh development in the cryptocurrency world, they can be used to good advantage to brief Bitcoin. A prediction market permits anyone to create any event they like, and wage on the outcome. For example, one could create an event, stating how Bitcoin’s price will drop to US$xxx by y date. If anyone takes up the speculator on that bet and loses, the speculator will have effectively shorted Bitcoin and made a profit Keep in mind prediction markets are infrequently used to brief Bitcoin right now, and this may not be the best solution to make a profit.
#1 Short-selling Bitcoin Assets
The uncommon breed of cryptocurrency speculators who wants to buy and sell actual Bitcoins can look into short-selling Bitcoin. This works as goes after: sell Bitcoin at a price you feel convenient at, wait until the price drops, and buy Bitcoin again. Albeit this is how most “traditional” traders make money, it is an efficient way of shorting Bitcoin. The only downside is how getting the price movement wrong will result in a net Bitcoin loss. Buy low and sell high is the most efficient way to publicly brief Bitcoin and attempt to persuade other traders to do so as well.
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About The Author
JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world’s leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.