Shorting Bitcoin Using CFDs
Bitcoin’fabulous spike appears to be irrepressible, thanks to many traders are rushing to get involved so as not to miss out. Nevertheless, there are financial vehicles accessible and that could turn Bitcoin and the cryptocurrencies markets to downside .
? ? Shorting Is a method to hedge the bubble bursting? .
? Shorting is a financialterm which means to sell product at one price in order to buy it back for a lesser cost at a later date, mainly in a contract for difference (CFD) . The idea is purely speculative but can have a considerable influence on the price.
? The Bitcoin market nowadays isfeaturing a bullish pattern; many cryptobrokers are clutching onto their position speculating that its worth will rise and this is aiding the rise. As such, there is a lack of sellers on the market. The power to short Bitcoin will add more sellers to the market.
? Bitcoin CFD contracts ?
CFDs are derivative financial vehicles which allow investors to short Bitcoin without actually own it. This method works in a way that the dealer signs up to a contract to sell an asset and buy it back at a later date (or vice versa: going long). The concept of long and short is derived from the perception that one must wait for an asset to rise in value, whilst there is the opposite assumption that a slip in value may easily take place at any moment.
? CFDs basically let people to trade on multiple product prices in the future without actually having to purchase the assets. If we translate this into Bitcoin market terms, we can picture an inflow of investors looking to short Bitcoin. an instrument which will increase the perceived supply on the market, and therefore {slow|reduce|scale down Bitcoin’s boom and bring sense of balance to the sector. .