The cryptocurrency Bitcoin has made a rather unnoticed debut in the world of finance when it was first introduced in 2009. However, its popularity has increased gradually over time as increasing numbers of people become attracted to this new form of currency.
Alongside the growing demand for Bitcoin has come to a growing value. After spending most of the first part of 2017 at $1,000, it reached $5,000 in October before soaring to $7000 in the early part of November. As of July 20, 2021, the value of a Bitcoin is around $31,400. 1 (By this point, it’s important to be aware that you don’t need to have a whole Bitcoin for you to be a part of this currency. You can buy “fractions” or “percentages” of a Bitcoin.)
Many financial institutions are now accepting Bitcoin. It’s also seen as a secure haven in an economy worldwide that’s volatile since Bitcoin is not under the control of any government. Learn how to make Bitcoin Profit here.
Key Takeaways
- Bitcoin has gained the attention of the financial press in general and some of the biggest investors in the world and key players in the world of investment.
- You can “short” Bitcoin. It is possible to earn money by gaining when any investment, which includes Bitcoin declines in value.
- You can profit from small decreases in value in addition to drastic fluctuations in Bitcoin’s value.
- Like any investment the art of learning about how you can short-sell Bitcoin isn’t a walk down the street. It requires research and a willingness to take a risk.
Betting Against Bitcoin
Despite the hype, the financial industry is chomping the chance to place bets on Bitcoin. Soon, they’ll be able to do so. Bitcoin futures are traded on CME Group Inc. (Chicago Mercantile Exchange) and TD Ameritrade.
When those futures contracts become accessible, hedge funds as well as other major investors are set to take advantage. Why? Many financial experts believe that Bitcoin is the most lucrative trading opportunity for shorting ever. The reason for this is that once it reached $11,000 The cryptocurrency fell nearly 20 percent in price in just 90 minutes, and dropped to just around $10,000… It then climbed above $11,000 a few days later. There’s an opportunity in this fluctuation.
Are the Glory Days of Bitcoin Over?
Bitcoin has been the subject of the financial press in general as well as the world’s largest investors and the biggest players in the world of investment and regular traders who have come recognize that trading with Bitcoin can be extremely profitable.
One method to get into the game is to purchase Bitcoin in the first place and hang the coin and wait for it to appreciate in value. When it has reached a price you are comfortable with, you are able to sell it and take the money.
This was a better option a while ago in the beginning. A lot of Bitcoin millionaires came into the beginning. Consider Erik Finman, who started investing in Bitcoin at the age of $12. Or, take Barry Silbert, who bought 48,000 Bitcoins at a cost of $350 each in 2014 after the U.S. Marshals Service auctioned off the collection belonging to Ross Ulbricht, the creator of Silk Road, the Dark Web site Silk Road.
To give you a sense of perspective, if you had made a bet of $1 in Bitcoin in the very beginning the value would be $2.5 million today. If you think you’ve missed the mark when it comes to Bitcoin you are able to invest in alternative cryptocurrency options in addition to Bitcoin.
Is Bitcoin the Next ‘Big Short’?
This brings us to what many believe will turn out to become the next method to make a profit on Bitcoin’s Bitcoin trend: you could “short” the cryptocurrency. If it goes up, it will go down and you can earn money when an investment, such as Bitcoin is worthless.
If you’re unfamiliar with shorting an investment, it’s an easy process, as far as trading. It’s the process of figuring out what investment to strategy and then making money in the event that the value of your investment increases or decreases that’s the most difficult part.
Like investing in any other field, you shouldn’t simply jump in without knowing the basics and being educated. The good news is you do not need to be an expert. Anyone can learn to short-sell Bitcoin and make money.
With the price of Bitcoin remaining unstable and with numerous analysts asserting that its meteoric rise isn’t sustainable and that a collapse is on the horizon, the urgency to begin trading and to learn how to short-sell Bitcoin is never more pressing. Another thing to take into consideration is that global governments are monitoring Bitcoin exchanges and investment in the Bitcoin cryptocurrency. Because Bitcoin is anonymous, authorities are concerned about tax avoidance opportunities.
Options for Short Selling
Do you want to short-sell Bitcoin? There are a variety of alternatives:
Direct Short Selling of Bitcoin
This is the simplest form of short-selling Bitcoin that you can do: Sell off the existing Bitcoin at a price that you feel confident with. You hope that the value will drop further If you choose to buy Bitcoin in the future at a cheaper price.
Margin Trading of Bitcoin
Many individuals begin short-selling Bitcoin through a margin trade platform specifically for cryptocurrency. In this kind of trading, you can borrow money from a broker and perform the trade, and hope that your bet will pay off.
There are many Bitcoin exchanges that allow margin trading as of now So you’re left with a lot of choices.
Futures Trading of Bitcoin
You may also discover ways to short-sell Bitcoin on the futures market. This is how it works the way it should be: a future is an agreement. The buyer, you are committing to purchase Bitcoin on a specific date at a fixed price. In this type of trading, you’re predicting–hoping–that the price of Bitcoin will go up. So the time comes when your contract ends, you’ll be able to purchase Bitcoin at a lower cost than the market rate.
Binary Options Trading of Bitcoin
Another method to determine how to short-sell Bitcoin is by using options trading that includes “put” and “call” options.
When you buy a put option that you purchase, you are able to sell a specific amount of Bitcoin and set it an amount, and at a set price at a specific date. This is known as”the strike” price. Put options gain value because Bitcoin is devalued in comparison to the strike price.
It is important to note that you aren’t bound in selling the options if aren’t inclined to. The call option contract grants you the option to purchase shares similarly. By using this contract, you are able to purchase a specific amount of Bitcoin at a certain price up to a specific date, which is the date of expiration.
Get Started Short Selling Bitcoin
We’re in the early days of trading short Bitcoin. For years, investors who are well-informed have come up with new ways to earn money from trading Bitcoin.
However, with futures contact coming from top-name institutions CME Group Inc., Cboe Global Markets Inc. as well as Nasdaq Inc., it’s going to be even easier for you to trade the currency. You can also earn money betting on its fall that some bearish market watchers believe is likely to happen.
With the fluctuations, you don’t have been waiting for a complete explosion to reap the benefits. You can profit from tiny drops in value, in addition to the dramatic fluctuations in the value of Bitcoin.
Like any investment knowing about how you can short-sell Bitcoin isn’t a stroll down the street. It requires research and a willingness to risk. The majority of financial advisors compare it with gambling…but when you manage your cards correctly it can pay off financially.
