Crypto trading is growing in resemblance to trading and investing in traditional financial markets with respect to the techniques and strategies used. Namely, the possibility and demand to trade on margin with leverage and to short sell are becoming more prevalent and popular in crypto markets.
This trend can be seen with the likes of PrimeXBT and BitMEX, both hitting record highs in trading volume and new users within the last month - due to the fact they are the two leading leverage providers.
Short selling, or ‘shorting’ is a technique used to profit from an asset’s expected decrease in value. Margin trading (also known as leverage trading) is a technique which allows you to trade with more capital than your account holds, the leverage utilized is how much your position is increased by (eg. $100 with 100x leverage becomes a $10,000 trade).
The two techniques go hand-in-hand, as you can’t short sell without lending from a broker or trading platform which is facilitated by trading on margin. To clarify, the margin is the minimum amount required to open the position and is used to cover the loss if the market turns up, instead of down.
The 5 best crypto exchanges which provide this possibility to earn in falling markets are:
Kraken
Kraken is one of the oldest and most popular crypto exchanges, available in the US, Canada, Japan, and other various European countries. The trading platform boasts a high level of liquidity which allows for the fast funding of trading accounts and high volumes.
Kraken offers margin trading with up to 5x leverage and, of course, short selling on BTC, ETH, USDT, XMR, ETC, REP, XRP, and BCH, against 7 fiat based currencies, including EUR, USD, GBP, YEN, CAD, etc.
Learn more: https://kraken.com
PrimeXBT
PrimeXBT is Bitcoin-based trading platform, most famously known for its high leveraging and short selling possibilities. Having only launched in early Feb this year, the state-of-the-art platform has exponentially grown and sees on average $500 million in daily trading volume, already.
Not only does PrimeXBT offer the industry’s highest leverage of up to 100x on BTC, ETH, LTC, EOS, and XRP (against USD), but recently added new traditional financial instruments in forex, commodities, and stock indices, with varying leverage of up to 1000x leverage.
Learn more: https://primexbt.com
Bitfinex
Bitfinex is one of the most well-known and long-standing cryptocurrency trading platforms, in operation since 2012, catering to more intermediate and advanced traders, as well as institutions.
Bitfinex allows its users to margin trade, long or short, with a leverage of up to 3.3x on all 128 assets by using their peer to peer margin funding facility.
Learn more: https://bitfinex.com
BitMEX
BitMEX is one of the largest Bitcoin trading platforms with some of the highest Bitcoin liquidity. Unlike many other trading exchanges, BitMEX only accepts deposits through Bitcoin, which can then be used to purchase a variety of other cryptocurrencies.
The trading platform significantly grew in popularity throughout the 2018 crypto winter as the only trading platform (at the time) which allowed traders to short Bitcoin with as much as 100x leverage. Reduced leverage allowances are also available to ETH (with up to 50x), LTC (with up to 33.3x), and BCH, ADA, and XRP (with up to 20x).
Learn more: https://bitmex.com
OkEX
Founded in 2014, OKEx is the second-largest cryptocurrency exchange in the world by volume. Access to the exchange is limited, however, by its stringent user guidelines.
Due to overwhelming market demand, OkEX increased its leveraging option from 3x to 5x on BTC, ETH, EOS, and LTC, to be traded against either BTC or USDT. Although this is quite modest, this still presents the opportunity to short the major crypto assets in falling markets with up to 5x profit potential.
Learn more: https://https://okex.com
Leave a comment below if you know of any other comparable trading platforms that also allow for short selling in falling markets.