Short bitcoin

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Cameo

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Probably a post on here somewhere but would appreciate any suggestions as to the best way to short bitcoin?

Inevitability of gravity seems to be stalking bitcoin and after years (!) thinking about it, now seems like a good enough time to short.

I'm not mad on margined positions (when it's my own money) but probably the most feasible way to get exposure I'm guessing
 
The very best of luck to you in your enterprise! :) These guys may be able to help you out with that as if memory serves, they took a short position on BTC in 2017/8 - @Duke of Marmalade @Brendan Burgess


In other news, Fidelity and HSBC just filed patents for digital asset exchanges but I don't see the point of it myself.
 
Hi Cameo

I initially made money shorting Bitcoin and took my profits.
When it rose again, I shorted it again, but closed out when it got to a ridiculous level as it was a bigger risk that I was prepared to take. It's now back down again below what I closed out at, but I couldn't have afforded to stay in. (Likewise Tesla is below what I had to close out at.)

So my advice would be not to bother. Even 1% of your portfolio can get out of hand if the crazy prices happen again.

I used spread bets on CMC Markets.

Set out a maximum you are prepared to lose - say €10,000
Assume a 100% rise before the inevitable fall.
Then you will manage your risk but, of course, limit your gains.

Brendan
 
tecate said:
The very best of luck to you in your enterprise! :) These guys may be able to help you out with that as if memory serves, they took a short position on BTC in 2017/8 - @Duke of Marmalade @Brendan Burgess
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Yep, I shorted using the financial betting site, IG. Can't say whether it's the "best" but its spreads and liquidity were good enough for me. To become a user of IG you will be subjected to the usual KYC pallaver*. Be careful to put "stops" on your losses. BTC has been $67k which suggests that as a betting prospect it is very asymmetrical. The most you can win is $16k per BTC shorted but clearly there is no limit to what you can lose.
Whereas I am firmly in the Warren Buffet camp that BTC has zero value, I count myself a tad lucky that I made a small gain on my short at $14.5k in 2018 and I haven't dabbled since.

(my post crossed with the Boss')

* actually I had to rejoin IG recently and needed to go through KYC all over again. But it was all done online in a video link to a very pleasant frauline (IG is German) which is worth it even if you don't have a bet.:)
 
ClubMan said:
"Best" in what way/by what criteria?
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Good question, I suppose I meant some of the following:

1. Legal
2. Ease of implementation
3. Liquidity in terms of low enough risk or being closed out on low volume
4. No very negative tax treatment
5. Kimit Capital at risk, shorting theoretically means unlimited losses but Id want to reduce the risk of huge losses as far as possible

I'll need to be disciplined to make sure potential losses are manageable

Next steps sounds like I need to get a spread betting account set up, decide how much I am willing to lose and suck it and see
 
Cameo said:
suck it and see
Click to expand...

Agreed. Take your time.

Open an account and play around with very small amounts so that you understand it. Short it and long something else.

But, there is a "risk" that with a play account, you will make profits and think you understand what is going on.

The short-term direction of any asset is random.

Brendan
 
The issue with Bitcoin is that it's so volatile. To keep your short position open it would require a lot of capital to prevent it getting closed due to predictable 20-30% moves in Bitcoin.

Even if you're willing to live with that volatility it will drain your other main resource, time. Bitcoin trades 24/7 and is a small market so can get manipulated by big boys at times when other markets are asleep. You'll be glued to the price of Bitcoin and investigating the news driving all those movements.

Good luck to you whatever you do, but my 2 pence is take whatever money you were going to use for this and do something with the time you'll have gained from not making this trade.
 
I agree with the warnings above. Shorting any asset is risky, but bitcoin is a market with an awful lot of dumb money. You might need very very deep pockets if the price rises. It won't matter if you are right or not about its fundamental value. If you go ahead with the strategy, then be prepared to cut your losses.
 
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