How to short Bitcoin - 6 easy ways

[RSRS]

During the twelve years of Bitcoin's existence, on most timeframes, BTC has been one of the best-performing assets on the planet. Even so, due to Bitcoin's extreme volatility, investors need a strong stomach to handle the inevitable steep falls in price. For traders, however, this increased volatility also means an increased potential to make a profit. For traders willing to bet on the price of BTC in both directions, there are several options that provide this solution. Are you brave enough to short the world's most liquid digital asset?

Source: Bitcoin Liquid Index

Bill Gates once proclaimed on CNBC's Squawk Box’ that he “would short bitcoin if there was an easy way to do it," as he considers bitcoin to be “kind of a pure 'greater fool theory' type of investment”. So can you short bitcoin? The answer is yes, and in this article we review the 6 easiest ways to short the BTC price.

1. Short bitcoin futures
The easiest way for institutional investors to short bitcoin is to sell bitcoin futures on the CME and CBOE, which is about to relaunch bitcoin futures trading. Retail investors also now have access to futures trading on exchanges such as BTSE.

Futures are standardized exchange-traded financial derivatives that obligate an investor to buy or sell an underlying asset, such as a stock index, a commodity or a currency, at a predefined price and date in the future.

In other words, futures contracts enable investors to bet on the price increase or price decline of an asset without having to own it. Bitcoin futures contracts, on the CME, for example, are cash for delivery, which means that once the contract has matured or is closed out no “physical” bitcoins exchange hands. Instead, only the profit or loss of the trade is exchanged in US dollars.

Interestingly, a study by the Federal Reserve Bank of San Francisco suggests that the Q1/2018 bitcoin price correction was partly due to the introduction of bitcoin futures on the CME and CBOE.

More information