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surely if you have a large short position on bitcoin, you may profit as people lose confidence?

• pjc50 11y ago
  It's not as easy to take out a short position as it sounds.
  • nosuchthing 11y ago
    With all the bitcoin fanatics who are convinced bitcoins are inherently rare and thus destined to increase in value, there are certainly opportunities for short options.
    • deleted 11y ago
      [deleted]
  • aianus 11y ago
    That's not true, it's pretty simple to short at Bitfinex (https://www.bitfinex.com https://www.bitfinex.com).
• davidgerard 11y ago
  Shorting relies on a fairly complicated and trustworthy financial system. It isn't some easy thing, it's quite a complicated thing to set up to work well enough to serve as a financial product. This does not actually exist for Bitcoin. Shorting requires trusting an exchange, and statistically trusting a Bitcoin exchange is historically a terrible idea. So no, you can't just short Bitcoin and expect to make money.
  • eru 11y ago
    You can sell bitcoin futures. That's equivalent to a short. Ie you and the counterparty agree on a price today to sell them bitcoins a fixed time later. If both of you keep honouring any margin calls you agree on, the risk is fairly low. No third party necessary. But yes, it is a more complicated transaction than the spot market.
    • davidgerard 11y ago
      Is this hypothetical, or are there a few working examples, or are there a lot of working examples, enough that one could casually talk about shorting Bitcoin? How big is this market for Bitcoin shorts and futures, what sort of volume are we talking about at the present time? The only shorting I knew of was on exchanges of questionable trustworthiness.
      • eru 11y ago
        Sorry, purely hypothetical. But, it might be worthwhile to make this work. If you implement the margin calls right, there's almost no risk for any party involved. Stand by, while I talk to my bitcoin obsesses friends about a startup idea.
      • aianus 11y ago
        https://www.bitfinex.com/ https://www.bitfinex.com/ Large, relatively trustworthy exchange. Costs roughly 3.3% APR to borrow $1m worth of BTC for shorting right now: https://www.bitfinex.com/credit/index/btc https://www.bitfinex.com/credit/index/btc Edit: corrected the interest rate
        • davidgerard 11y ago
          https://np.reddit.com/r/BitcoinMarkets/comments/3nf3aa/daily_discussion_sunday_october_04_2015/cvnqr37 https://np.reddit.com/r/BitcoinMarkets/comments/3nf3aa/daily... I have no confidence in Bitfinex's ability to literally run their own systems. Typical Bitcoin system, i.e. cobbled together from cheese and string by amateurs. It's as if financial software and systems never existed.
          • aianus 11y ago
            Blame the government. It's not clear that it's legal to run a Bitcoin margin trading system in the U.S. so you have to make do with less-than-ideal offshore outfits.
• klodolph 11y ago
  There's really no such thing as a short position in currency, because you are just exchanging it for other currency, which makes it a long position in the other currency.
  • eru 11y ago
    Currency or commodity.
  • bduerst 11y ago
    Only if you're being literal. They didn't say short the currency, and there are several ways to short bitcoin: http://www.investopedia.com/articles/investing/092214/no-faith-bitcoin-profit-shorting-it.asp http://www.investopedia.com/articles/investing/092214/no-fai...