CoinWorld reports:
Recently, the price of Bitcoin has plummeted like a slide, breaking below the $54,000 mark, causing many accounts to burst like bubbles. In this roller-coaster ride of digital currencies, not everyone is lamenting the decline; some are quietly rejoicing — these are the savvy short sellers. Today, let’s discuss how you can go against the grain when Bitcoin’s price decides to head south, earning those tasty profits.
What is “short selling”?
Imagine yourself in a bustling marketplace, holding a bunch of apples you’ve just borrowed. You hear whispers that tomorrow, apples here might flood the market. What do you do? You promptly sell these apples. When apples indeed become ubiquitous and their price hits rock bottom, you buy back the same quantity, return them to the original owner, and pocket the difference. This is the essence of short selling: borrowing, selling high, buying low, and profiting from the spread.
Process of shorting Bitcoin:
Borrow: First, you need to borrow Bitcoin from a platform willing to lend.
Sell: Once borrowed, immediately sell at the market price.
Wait for decline: Patiently observe the market until Bitcoin drops to a price you deem low enough.
Buy back: Purchase the same amount of Bitcoin at the lower price.
Return: Return the purchased Bitcoin to the lender, happily walking away with your profit.
ONE MORE THING
Before shorting Bitcoin, remember, this is akin to a gamble where risks and opportunities coexist. Do not risk your entire fortune unless you’re prepared to witness your assets potentially “plunge” like Bitcoin prices. Short selling is a high-risk investment strategy that requires cautious consideration.
