If you had shorted Bitcoin when after it had reached its all time high last year, you would have made a very healthy profit. And there are some investors and business men such as Bill Gates and Warren Buffet who believe that it has further to fall.
Shorting bitcoin is actually very easy – in fact, it’s as easy as going long on Bitcoin. So today I’m going to share with you different options for shorting Bitcoin. None of these require any sort of borrowing – I’ve decided to only list CFD trading options as it makes shorting much simpler.
Shorting Bitcoin on eToro
The good thing about shorting bitcoin on eToro is that your position is not leveraged. All the other options require you to use Leverage. Using leverage would be fine for stocks or forex, but due to the hugely volatile nature of Bitcoin, it’s much much risker with a Bitcoin short trade.
The other great thing about using eToro for shorting Bitcoin, is that you’ll pay no overnight or weekend fees on small positions. And larger short positions in Bitcoin will only incur a very small fee (think $0.01). Some of the other platforms, such as Whaleclub charge hourly financing fees which really eat into your profits.
So this is why I think eToro is currently the best option for shorting Bitcoin. Unfortunately it’s not open to U.S traders, so you’ll need to use one of the other options.
How to short bitcoin on eToro:
- Open a trading account here if you don’t already have one.
- Make a deposit. eToro requires a first time minimum deposit of $200.
- Visit the Bitcoin markets page on eToro
- Click on “Trade” and then “Sell”
- Enter the amount you want to trade
Using Plus500 to short Bitcoin
Plus500 is a popular choice for those looking to get into cryptocurrency trading. You’ve probably seen one of their ads on Youtube! It’s a pretty standard CFD trading platform. All positions on Plus500 are leveraged and you can’t change the amount of leverage, which is a bit of a downside. The upside is that getting started trading is very easy.
Plus500 uses a web based trader, so once you’ve signed up and deposited you can get started trading without needing to download any complex software.
Using 1Fox to short Bitcoin
In order to short Bitcoin on 1Fox, you’re going to need some Bitcoin to start with. Which is a bit of a catch22. But that’s because 1Fox only accepts deposits in Bitcoin. 1Fox is the partner site to 1Broker. Where as 1Broker is for Forex and Stock trading, 1Fox is for leveraged cryptocurrency trading. So if you’re looking to make a big short play, and load up on leverage, then 1Fox is for you (I obviously don’t recommend this as it’s super risky!).
Signing up and depositing on 1Fox is super quick. No verification needed. It took me about 5 minutes to get setup and I only had to wait for the bitcoin transaction to confirm.
Shorting Bitcoin on Whaleclub
Just like 1Fox, Whaleclub only accepts deposits in digital currency (such as Bitcoin, Dash or Litecoin). So you will need to buy Bitcoin at somewhere like Coinbase and transfer it across. The advantage of this over fiat, is you won’t need to go through any lengthy verification process. In fact you can get trading on Whaleclub in a couple of minutes. Just watch out for the financing fees which are charged on open positions. Whaleclub is a good platform for making short term trades that stay open for a shorter amount of time.
If you’re looking to open a short position that will run for many weeks or even months, I would use eToro as you’ll save a fortune on fees.