How to Short Bitcoin with BTCC Bitcoin Futures Exchange

In 2017, following the Bitcoin price hit its previous record of nearly $20,000, BTC plummeted under $6,000 in 2018. The historical price pattern of BTC suggests that there is an opportunity to make a profit by short-selling Bitcoin.

There are many ways to short Bitcoin, some of the popular short-selling methods included exchange and derivative products. Short selling referred to the process of selling the cryptocurrency with the speculation that its value will fall, and buy the asset back at a lower price. Traders are looking to gain profit from the difference in market price.

There are many ways to short Bitcoin, some of the popular short-selling methods included exchange and derivative products. Short selling referred to the process of selling the cryptocurrency with the speculation that its value will fall, and buy the asset back at a lower price. Traders are looking to gain profit from the difference in market price.

Short Sell by Exchange

To short-sell Bitcoin, investors would need to find an exchange that offers a short-selling service to borrow the actual Bitcoin to sell it on the market.

Shorting Bitcoin with Bitcoin Futures

Derivative product is another way to short sell Bitcoin. A futures contract is a type of derivative product, which refers to an agreement to buy or sell a particular asset at a predetermined price at a specified time in the future.

Traders can short Bitcoin by selling a BTC futures contract with the expectation that the price of BTC will decrease in the future. Whereas, traders purchasing a BTC futures contract would expect the price of BTC will rise in the future.

Strategies to Short Sell Bitcoin

Traders can make their decision based on both technical analysis and fundamental analysis. It is very important to understand the market sentiment and conditions thoroughly to make an informed decision.

There are some events that have acted as catalysts for BTC price decline in the past. Events that have triggered price plummet included hard forks, regulatory concern, security incident of major exchanges, key developers exiting the Bitcoin network, and delay in major network upgrade.

Risk of Shorting Bitcoin

Bitcoin is well known for its extreme volatility, and the price of BTC has soared from 0 to all-time high of more than $41,000 over 9 years. Many people in the crypto space and critics believe in the potential of Bitcoin reaching over $100,000. For this reason, it can be very risky to short BTC in the long term as the historical price record suggests that the price of BTC can skyrocket at any time, which could create huge losses for investors.

Short selling is considered to be very risky. For instance, if you invest $2,000 in Bitcoin, your loss will be limited to $2,000 if the value of BTC plummets. However, your loss could surpass your initial investment when you short sell Bitcoin. For this reason, it is important to set up a take-profit and stop-loss price target when you trade Bitcoin futures contracts.

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