Most investors treat crypto as an asset, and always look forward crypto to the moon. However, not every investor in crypto market predict a rise in crypto price. If so, how can you gain profits from a drop in crypto price? Here I suggest the 2 methods.
a. Short Selling on Cryptocurrency Exchanges
On some popular platforms like Poloniex, Kraken, GDAX, BitMex and Bitfinex, they offer “physical” bitcoin short selling on margin. When short selling bitcoin on a cryptocurrency exchange, an investor is selling bitcoin they do not own. To do that, investors can borrow bitcoin from margin lenders on the exchange for the duration of the open position. Once investors close out their bitcoin short, they gain or lose the difference from where they sold and where they are buying back minus the margin lending fee, which differs from exchange to exchange. If you are comfortable trading on digital asset exchanges, short selling on these platforms is definitely a great idea to earn profits.
b. Shorting Bitcoin CFDs on Retail Brokerages
For investors who prefer to trade regulated financial products and are happy to receive their profits in fiat currency, bitcoin futures or contracts for difference (CFD) would be the better option. Some online CFD broker such as eToro, AvaTrade or Plus500 provides BTC short selling service. CFDs function effectively the same way as futures contracts but are tailored towards retail investors. Using CFDs, investors can bet on a price increase or decrease of an underlying asset without having to own it physically. Investors can go long or short bitcoin using margin as well.
Hope these 2 methods inspire you some ways to gain profits!