Short Trades

How to profit from a decrease in the asset price

In August 2018, the capitalization of crypto assets fell below $ 200 billion. A little less than a year ago, it exceeded $ 822.5 billion. Against this background, the confidence of the crypto economy fans is gradually melting along with the price of bitcoin.


What did it begin with?

Facebook’s CEO Mark Zuckerberg was the first one who tacitly declared war on digital currencies. The social network tightened the rules for placing advertisements for ICO-projects and other crypto industry representatives on the social network.

Twitter and Google followed the lead of Zuckerberg. In conditions of advertising isolation, bitcoin, ethereum, ripple and dozens of other popular assets began to decline rapidly.


Hope springs eternal

Investors began to sell the crypto currency they had purchased. The price of bitcoin collapsed to $ 10 thousand, then $ 9 thousand, and is now trying to keep its balance at $ 6 thousand.

In such circumstances, traders tried to find a reasonable entry point. They used the forecasts made by well-known representatives of the industry. Analysts used dozens of analysis tools to make a forecast.

The mechanism of most crypto exchanges does not provide for going short. This motivates traders to consider only one direction of trade.

Due to an inability to go short, people are united by the desire to see bitcoin growing up to $ 20 thousand again. But the market is still not on their side. The $ 622.5 billion decrease in capitalization is an approximate amount of losses that the investors have suffered and continue to incur.


The end of an era or new possibilities?

Tougher legislation, as well as the desire of the authorities to regulate cryptocurrencies, led to a decline in the digital coins popularity. The number of transactions inside the network has more than halved, and no one remembers the prediction of “a bitcoin for $ 1 million”.

But traders continue to watch the charts. And this is the reason: the volatility of the currency is still at a high level. During the day, the price of a crypto asset often grows or decreases by 5-10%.


Making money on a decrease in the asset price

Within this context, traders should be able to earn not only on the asset’s growth, but also on its decline. They can do it by opening short positions on the Olymp Trade Forex platform.

For reference: a short trade (a short sale, going short) is the sale of an asset that the seller does not own. In fact, the asset is borrowed for a while from a broker or a stock exchange. When the position is closed, the asset is returned to the lender.

On our platform, you can go either short or long when trading digital coins. Since there is no physical delivery of the asset, you do not have to create a crypto wallet, store encryption keys and things like that. As well as you do not have to lose money on investing in falling bitcoin.

Start trading
Keep an eye on the cryptocurrency exchange rates and make money by going short on Olymp Trade Forex!
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