Should I short bitcoin? With Chris Guida (DTube)
After a solid year of bitcoin making low after low, you might think that it will continue to make new lows. You might even be so confident as to sell bitcoin short - that is, to borrow bitcoins in order to sell them, and profit when it goes lower. Would that be a smart move in market like this?
Or would the opposite action be correct - has crypto been going down for so long that it's "due" for a turn around? Should you invest in cryptocurrency now, in February 2019?
The other day I spoke with long-term Bitcoin enthusiast and software developer Chris Guida to get his take.
▶️ DTube
▶️ IPFS
I must say, that I actually found this very confusing, and hard to follow. I did google short coining, but couldn't get a solid enough grasp on it, to follow your conversation.
Peace.
Thanks for the feedback. It's not "short coining", it's "short selling" or just "shorting" - for short.
Short selling is where you borrow an asset and then sell it. People do it when they expect that asset to go down.
So for example, say you saw bitcoin at $20,000. You say, that's definitely the peak. So you borrow 1 bitcoin from your friend. It goes down to $8,000, and you buy 1 bitcoin. Your friend still has his 1 bitcoin, and you have $12,000 more, because you bought the bitcoin for cheaper.
The reason it's so risky is, what if bitcoin kept going up? If it went up to $50,000, you'd be on the hook for $50,000.
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