Bitcoin Forum

Does shorting and margining bitcoin help stabilize the price? If so, what is the reason in market terms?

How might shorting impact the next bubble?

No.

There's no options exchange to short bitcoin. (If anyone knows of one, correct me.)

And buying bitcoin on margin is just buying it on loan. The loan needs to be covered at somepoint but there's no requirement that it be covered by buying bitcoin, it could be covered with fiat.

should will not help the next bubble, if shorting is to heavy in play, then maybe the opposite will happen, in other word there will be a downtrend and not a pump at all

but if you look at the market we are pretty stable, this mean that there are less shorters and more bullish traders, or simply more buyers and shorters in the same number as before

Shorting helps stabilize the market by making bitcoins available for buyers to buy.

How would that be ? Aren't there more people selling bitcoins than the number of people buying it ?
And wouldn't selling create a selling pressur thus driving price down ?

Where did you get this from? AFAIK since last week, the price has increased which means that there is more buy power than the sell pressure. Also you got something wrong with your statement there, it doesnt matter how many people are selling it because what matter is how many BTC is being sold not how many people are selling it


Sell pressure isnt created by selling BTC, it only occurs when there is less buy power than the sell power. The market will be able to hold off if there is a buy power, selling 10k BTC isnt going to create a sell pressure if there is a buy order for 11k BTC . Another thing that will create the sell pressure would be a whale / group of whale constantly doing a bearish to the market, forcing the other to go deeper and lowering the price

FXopen allows you to Short bitcoin but not to leverage if I recall correctly
As for the main thread question it can stabalize the price if Short positions get squeezed out
On the inverse it could cause a market shift to occur faster if their are people who predict a price drop and switch to shorts over longs.

Shorting should stabilize the price, yes.

The problem with previous bubbles was that everyone gained by the price going up, up until the whales decided to bail out.  This time people will be losing monex as the price rises, and see greater opportunities to make more money as the price rises.

I expect the next bubble to have a big pop high, then go up and down for a while, before building up slowly from there.  The big bust out will be due to shorters being hit by margin calls, another aspect that wasn't there last time.

Shorting is possible, with leverage, on bitfinex.com, okcoin.com, 796.com and others.

I doubt that it will have a very good effect on price stability since someone could go short big time with leverage, then manipulate the market so that it goes down and sell his positions. So no, it probably will lead to more volatility.

volatility is necessary to keep investors interested. if price doesn't move much, traders get bored and move to other more volatile investments. don't think shorting will ever result in the price being stable.

As far as i understand the more trading options and investment channels there are the better the long term stability of bitcoin will be.  However just the ability to short isn't going to hold down a bubble when it starts going up.  Shorters will get raped if they hold shorts for too long.  Just like how shorting on the way down was a no brainer from $1200.

Stability refers to be in the state of stable.
I don't think we are going to have stability because shorting anytime soon.  Shorting will not increase the stability anyhow

i think it's the opposite , because shorting , usually, push the price toward the bottom
buying for long term or medium term, help the price to stabilize at a higher levels, i think
holding definitely is not helping the less volatility of the value, but going long is more healthy for the market
because it let the price rise, and we know that with a better price a better adoption has more chance to kick in, which mean more stability