As it stands, there’s only a handful of cryptocurrency trading platforms that offer the ability to short-sell. Simply put, to short-sell, or “going short” is when you bet on a given crypto-asset not going up, but rather, going down. Given the state of the grueling bear market that was 2018, this is a missed opportunity for many who predicted the downward market trend.
Most traders in the crypto market will enter and leave a position within the same day, as opposed to investors who will place a position and leave it for years. This further proves that what matters most to traders is the volatility that occurs within the crypto market, and downward swings make up a large majority of any asset’s market activity.
Trading with the trend is considered the norm within traditional markets, thereby creating an opportunity for a consistent profit when trading any asset. Unfortunately the cryptocurrency market is lagging in this regard.
PrimeXBT is a new crypto-asset trading platform that was built to address this void, and allow crypto traders to increase their profit potential in the same way that prevalent stock traders do with this widely vantaged, tried-and-true technique.
Short-Selling Explained
To short a crypto-asset is the inverse of buying a crypto-asset, which often referred to as “going long”.
For example, ‘John’ heard some controversial news about a particular cryptocurrency (“XYZ”), and expects the market to turn down. In order to profit from his prediction, John will short this cryptocurrency.
But how exactly does this work?
Say John wants to short this cryptocurrency at the current market price of $100; he will borrow $100 from the PrimeXBT platform, which is then credited to his account.
As John predicted, the market crashed to just $70. He then buys back in at the new market price of just $70, which leaves him with a profit of $30.
Essentially, to ‘go short’ a seller borrows funds in order to sell high, buy low and keep the difference.
A Safety Net with Stop-Loss Orders
The flipside of this, is of course if John was wrong and the market turned into an upswing. Unlike a market crash there is no bottom, or limit to how high the price can go. For this reason, Prime XBT provides a stop-loss order service that allows you to set the price you wish to exit a position (how much your willing to risk/can afford) and will automatically liquidate at that point.
Furthermore, PrimeXBT is one of the very few trading platforms that allows for leverage trading of up to 100X. This means your profit potential could be multiplied by up to 100. Leverage and stop-loss orders can simultaneously be implemented on any kind of trade possible on the Prime XBT platform. Soon, crypto enthusiasts can safely utilize the benefits of leverage trading, in order to profit in both bull and bear markets, and with the added safety net of a stop-loss order.
The PrimeXBT trading platform is due to launch by end of January 2019. To find out more check out the website here.