The $ 10,000 Bitcoin badault has awakened bears who see new evidence of a bubble. There are ways to bet on a collapse, but they are even more risky than changing the cryptocurrency on the upward path.
The options for the short bitcoin are mainly through unregulated exchanges, and very risky given the volatility of Bitcoin. Not to mention that it has not been exactly a good year for bitcoin bears given the 10-fold increase in price. But for those bold enough to try, there are ways to bet against the rise of Bitcoin.
"All short options in the common markets are available in the bitcoin market," said Charles Hayter, co-founder of the CryptoCompare market tracker. "There is quite good liquidity to short out with bitcoin, the main difference with the short circuit with the Nasdaq, for example, is that it will be much more volatile, so there is much more risk, the debt rate will also be a bit higher. . "
Contracts for difference
One of the most popular forms of short bitcoin is through CFDs, a derivative that reflects the movements of the badet. It is a contract between the client and the broker, where the buyer and the seller of the CFD agree to settle any increase or decrease in the prices in cash on the date of the contract.
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"CFD is currently a big market if it wants to reduce bitcoin, especially above that 10K milestone, which we believe will bring some backwardness," Naeem said. Aslam, chief market badyst at TF Global Markets in London, which offers the contracts. . "The break could push the price well above $ 10,100 and it would be in that area when we could see some setback."
Another common form of short bitcoin is through margin trading, which allows investors to borrow the cryptocurrency of a broker to make the exchange. The trade is in both directions; An operator can also increase his long or short position through leverage. Depending on the funds saved as collateral to pay the debt, this option increases the already risky bitcoin trade. Bitfinex, one of the largest cryptocurrency exchanges, requires initial capital of 30 percent of the position.
The short-term trading positions in Bitfinex were around 19,188 bitcoins on Monday, compared to 23,931 long positions, according to bfxdata.com, which tracks the data on the stock exchange.
Short Bitcoin Loan
Most brokerages that allow margin trading will also allow customers to lend short bitcoin without leverage. This will be a less risky way to bet that the price of bitcoin will decrease.
The futures market is not as widely developed as the CFDs and trading margin, but it is still possible to make bearish bets on bitcoins with options. For now, LedgerX is the only regulated exchange and compensation agent for cryptocurrency options in the US. UU CME Group Inc. and Chicago Board Options Exchange requested approval to include bitcoin futures, so they can open the market to more investors.
Bitcoin ETN Short Circuit
Investors can also bet indirectly against bitcoin by short-listing notes with a cryptocurrency exposure, such as Bitcoin Tracker One based in Stockholm and Bitcoin Investment Trust of Grayscale Investments LLC The risk is that these notes do not always align with bitcoin, so the exposure will not be perfect.
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Aslam at TF Global Markets said it is not seeing an increase in short bitcoin demand.
"At this moment, the race is still on the rise," he said.