Bitcoin Forum

This is the only way to do it I guess, I love the fact you cant naked short!!!!!!!!!!!!!!!!!


Since its inception, bitcoin has been counted among the highly valued currencies in online exchange. Its value has climbed by 230% (denominated in dollars) and turning out to be far more profitable trading option than stocks and commodities. However, there are people who believe that the value of their bitcoins may go down, so they decide/wonder to short them frequently. The question is how?
ForexMinute provides you with a series of answers to this question. One of the ways to short bitcoins is to use a currency pair; for instance, there are many bitcoin exchanges which have their contracts based on the BTC/USD, Gold/BTC and Crude (WTI)/BTC.

At least not yet. When the Winklevoss ETF finally comes out...

Technically you can already short, on the experimental exchanges like bitfinex. Problem is, someone signing up on this exchange (they're still in "beta", as they say themselves) is most likely somewhat BTC friendly to begin with and will probably only short for brief moments during crashes.

Those with deep pockets coming from the legacy markets probably wouldn't want to go on an exchange like that... probably not on *any* of the existing exchanges. And even if they would, leveraged shorting in any substantial size would almost certainly crash the exchange, if not their servers, then through sheer volume.

So I would welcome a more traditional (and probably: secure) way for "outsiders" to short BTC: it might dampen prices for some period, but I'm convinced BTC needs this level maturity before it can get to the next level -- the next order of magnitude of price will be more difficult to reach, IMO.

I shorted once on bitfinex to test it out, worked out fine and even made some 300$ :) But of course even thinking about shorting BTC for some real money sounds stupid.

+1. If they want to short Bitcoin the traditional way, the borrowing rate on BTC has been dirt cheap on bitfinex, around 2% for the past few weeks. Of course, like you said, the issue is that the folks who would like to short Bitcoin longterm wouldn't use an exchange like Bitfinex.

Which is why I had to smile so broadly just today when I was reading another one of those "harumph, if we could only properly short BTC, this silly bubble would've popped long ago" articles, on Forbes. I'll give the author some credit, it wasn't even a half dumb article, just that the irony is palpable: they're anti-BTC, so they wouldn't want to touch it with a 10 foot pole and give it any legitimacy, but then they complain that they don't have any secure, established financial instruments to work with it.

Good to know there are ways of shorting Bitcoin available.  Gonna have to make a list of the sites mentioned in this thread so I can put this information to good use, cheers.

You know the "doomsday" bears say that eventually Bitcoin will be shorted into oblivion.

Ha.

Has anyone ever seen a short "squeeze"?  You want to see the market explode? Then just get some heavy pockets to short against the titlewave of money coming in form institutional investors next year. As soon as it turns against the shorts, expect a ton of market order buys to hit the exchanges.

Would be fun to see.

Shorting is great for a trade, but any good trader knows that the upside gain is never greater than 100%, while the downside risk of shorting bitcoin could literally be 1000%+.

I used Bitfinex first time today and made 2300$ on one of dips. Was up as much as 4800$ but failed to close position than, started at some 3000 but slip took it's part.

It's a fun to play with more btc than you have  ;D

People who naked short Bitcoin will end up wearing barrels.

Shorting Bitcoin is an example of Bitcoin becoming used as a unit of debt. The more Bitcoin is used to denominate debt, the more stable it will be in the long term, although the less valuable it will be in the short term.

Sort of like the USD. If it wasn't used to denominate debt, it would have collapsed long ago. But it is, so it hasn't. The difference? No entity can borrow BTC infinitely, so the debt is 'real' - it can't always be paid back with more debt. As such, Bitcoin-denominated debt makes sense for the lender, and would hugely help Bitcoin's future. If nobody borrows BTC, then BTC will forever be, at most, a sort of floating commodity like gold is right now.