Cryptocurrencies are in a state of turmoil.
After skyrocketing to over $20,000 per coin at the end of 2017, the cryptocurrency market has fallen dramatically and hovered around $6,000. This type of volatility is when it pays off short selling on digital coins.
So how to short crypto? Shorting cryptocurrencies should be done with caution because one wrong step could lead you into a tricky spot if you don’t sell your coins before their price goes up drastically again. The cryptocurrency market is still very young and subject to massive fluctuations, making it a risky market to invest in. Even though the cryptocurrency market has demonstrated a lot of volatility, some currencies might be worth keeping an eye on. Let’s take a look at the best cryptocurrencies to short sell in 2018:
Litecoin
Litecoin is called “digital silver” by many because it resembles the price behavior of silver – it’s more stable and less volatile than other digital coins. Even though Litecoin has lost some of its market value, it is a good investment for short selling as it is probably not going to increase much in price, and it could even drop a little. You can short sell Litecoin on either BitMEX or OKEx.
Ethereum Classic
Ethereum Classic has always been the second most popular cryptocurrency after Etheruem, but it still hasn’t managed to gain more than a 30% share of the cryptocurrency market. With its relatively low market value, Ethereum Classic is an attractive investment for short selling because this currency already has a high enough price per coin to make a profit from short selling.
Cardano
Cardano is one of the newer digital currencies, and – even though it still has a long way to go before mainstream users and businesses will accept it – it still has a pretty high market value. Cardano is still a risky investment, and it is not likely to increase in price much in the future as it is still far from being finished and optimized.
Zcash
Another cryptocurrency with a relatively high price per coin but is also very volatile – making it a good choice for short selling – is Zcash. Digital currency has been very volatile in the past and might continue this trend, especially if its users start to use it more often. If Zcash manages to gain users, higher prices will probably be inevitable.
Siacoin
Another digital currency shorted on the BitMEX exchange is Siacoin. Siacoin is not a currency that has been around for very long, but it is already working with some companies and even has its shopping cart on Amazon. If you are looking for a short-selling cryptocurrency still relatively new, this would be the best option.
Steem
Steem was created in March 2016, and already in April 2017, it was trading at a rate of $0.
These currencies can be short-sold on the BitMEX exchange. South Korea did something that could significantly affect the cryptocurrency market and how to short crypto, local banks are now allowed to accept fiat currency deposits and Bitcoin (BTC) transactions in their branches, which means hundreds of thousands of people across South Korea are likely to start trading digital currencies with their bank accounts.
This will lead to even higher prices for these currencies as many people will start using them as an investment. Therefore, it is essential to be careful about short-selling digital currencies like Bitcoin, Ethereum, and Litecoin.
BitMEX exchange is a good option for short-selling Bitcoin, Ethereum, and Litecoin as it is less risky than using a decentralized exchange. If you are still new to the world of cryptocurrencies and want to get involved in trading digital currencies, a good way to start is by researching which digital coins are likely to increase in price at a later stage. Once you have learned more about the market, you might want to try short-selling these coins.
This can be done through Bitcoin, Ethereum, and Litecoin. Shorting cryptocurrencies is a risky business. Even though cryptocurrencies have already gone through a lot of hype and Bullrun, you still should be careful with which currencies you invest in.
If the currency you short sell increases in value after the short sale, the initial deposit you made with your broker will not be enough to cover your loss. In that scenario, you could lose even more money because your broker might be able to lend you more money to cover the losses.
This is why it is essential to research and check out different short-selling exchanges. For example, a good option for short-selling digital currencies is BitMEX exchange, but also OKEx or Poloniex can be used for this purpose.
All the digital currencies can be shorted on these exchanges, and it is possible to short sell some of the currencies from BitMEX, Poloniex, and OKEx.
If you are new to cryptocurrencies, an excellent way to learn about this fascinating market is by checking out resources like CoinMarketCap.
Bitcoin is probably the most volatile cryptocurrency there is and the first to gain widespread acceptance. Many investors rely on Bitcoin and keep it as an investment currency, even though its value has already decreased significantly since its all-time high in December 2017.
Everyone interested in cryptocurrencies should know that Bitcoin could fail spectacularly in the long term: online reports suggest that Bitcoin might lose more than 90% of its value in the next two years.
In conclusion, shorting cryptocurrencies is an exciting way of making money. You can make money if the value of the currency you short sell drops, and you can even make money if the value goes up a little. Short selling is a great way to improve your investment skills, and it can teach you a lot about trading. If you are new to these markets, take it slow and learn as much as possible.