How to Short Crypto: Profit During Crashes and Retracements

Today’s cryptocurrency markets are intrinsically volatile. A currency that’s on a hike today might experience a dip tomorrow that you couldn’t have imagined. In fact, many cryptocurrencies’ prices constantly change throughout the day. 

Along with regulatory actions, crypto volatility can lead to fear-driven flash crashes and slight retracements after big rallies. To avoid experiencing losses when this happens, you can tap on a concept called short selling that allows you to make money when prices are falling — even without owning the underlying cryptocurrency that you’re short selling. In this article, we’ll explain cryptocurrency shorting, its associated risks and how to short cryptocurrency.

What Does Shorting Crypto Mean?

Shorting cryptocurrency is the process of selling crypto at a higher price with the aim of repurchasing it at a lower price later on, ideally in situations where a cryptocurrency’s price is expected to fall.