Despite some bumps in the road, digital currency bitcoin made a major recovery off of Friday’s lows, gaining back more than $1,000 in price.
However, for traders still skeptical of the cryptocurrency’s astronomical gains in the past several years, here are four ways to profit off of a potential bursting bitcoin bubble.
1. Short Sell The Bitcoin Investment Trust
This option may seem like the easiest and most obvious choice for stock traders, but in reality, it’s more difficult than it seems. Since the Bitcoin Investment Trust GBTC 1.22% trades on the OTC Market rather than a major exchange, many major online brokerages don’t allow it to be sold short.
2. Cryptocurrency Margin Trading
Bitcoin exchanges such as BitMex, AVAtrade and Plus500 allow margin trading, which lets traders to sell bitcoin short on margin. Of course, margin fees and leverage could also play a major role in this approach as well.
3. Sell Futures Contracts
Traders looking to bet on a bitcoin sell-off can go to bitcoin futures markets such as OrderBook.net and sell bitcoin futures contracts. Of course, futures contract sellers must first own the bitcoin that they agree to sell and they’re obligated to sell at the specified price no matter how profitable or unprofitable the contract ends up.
4. Bitcoin Predictions Market
Prediction markets are very thinly-veiled online gambling sites that allow users to create their own personal wagers. If another user comes along and accepts a wager that bitcoin prices will fall, users could…
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