How to Short Bitcoin in 2021

In this article, you will learn exactly how to short bitcoin in 2021, including a list of the best exchanges.

Many exchanges and broker trading platforms out there allow shorting but very few traders know where to find them.

Have you ever wanted to short bitcoin because the market was too high?

This is a feeling many traders have and when the time comes to go the opposite way after a long bull run, you need a good broker to back you up with the possibility to sell bitcoin.

The best thing with shorting BTC is that you can profit from a negative market move and if you are really good at it you can even use leverage.

Today you will learn exactly how to play the market sell-offs and potentially earn some money while doing it.

Below you will find a list of the best exchanges for shorting BTC in 2021, there will also be a guide on how to short bitcoin where you will learn the ins and outs.

Platforms That Allow Bitcoin Short Selling

Regulation
Rating
Best for
Trading Fee
Minimum Account
4.45/5
Excellent
Regulated by
ASIC
0.05%
10$
Day Traders
Quick Review
  • Established 2018 Seychelles
  • Type Cryptocurrency Exchange
  • Currencies USD, VND, TRY, THB, CHF, SEK, ZAR, SGD, RUB, RON, GBP, PLN, PHP, NOK, NGN…
  • Funding Visa, Mastercard, Cryptocurrency, Bank transfer, SEPA
  • Languages English, Hindi, Japanese, Spanish, French, Turkish, German, Vietnamese, Thai, Italian
  • Restricted countries United States, United States Minor Outlying Islands, Canada, Japan, Algeria
  • Products Cryptocurrency, Forex, Indices, Commodities
  • Trading platforms Webtrader, Tradingview, Own trading platform Windows + Mac, Mobile App
  • Devices Desktop, Smartphone, Web, Tablet
  • Max leverage 1000
  • Order types MO – Market Order, SL – Stop Loss, SM –
  • Support Email, Live Chat
  • Fast Execution Speed
  • High Security
  • Copy Trading
  • Price Prediction
  • Quick Registration
  • Advanced Trading Tools
Pros

Suitable for large traders
Very fast trading platform
Multiple products on the same account

Cons

Not available for traders in the US
The trade interface requires some practice
New trading platform

4.08/5
Excellent
Regulated by
FinCEN, GFSC
0.25%
20$
All Traders
Quick Review
  • Established 2013 United Kingdom
  • Type Cryptocurrency Exchange
  • Currencies USD, EUR, GBP, RUB
  • Funding Visa, Mastercard, SWIFT, Faster Payment System (FPS), SEPA, QIWI, Skrill
  • Languages English, Russian, Mandarin (Chinese), Italian, Portuguese, Spanish
  • Restricted countries
  • Products Cryptocurrency, Forex, Stocks, Metals
  • Trading platforms Webtrader, Own trading platform Windows + Mac, Tradingview
  • Devices Desktop, Smartphone, Web, Tablet
  • Max leverage 100
  • Order types MO – Market Order, LO – Limit Order, SL –
  • Support Phone Number, Live Chat
  • Buy Cryptocurrency
  • Veteran Trading Platform
  • Fiat Account
  • Beginner Friendly
  • Margin Trading
  • Staking
Pros

Very easy to use for beginner cryptocurrency investors and traders
Regulated cryptocurrency exchange for extra security and trustworthiness
Cex.io is a veteran cryptocurrency exchange and has been live since 2013

Cons

Very poor trading interface for day traders and scalpers
Low-quality customer support
Few fiat currencies accepted

4.06/5
Excellent
Regulated by
FSA
0.30%
10$
All Traders
Quick Review
  • Established 2014 Japan
  • Type Cryptocurrency Exchange
  • Currencies AED, ARS, AUD, BDT, BGN, BHD, BMD, BND, BRL, BTN, CAD, CHF, CLP, CNY, COP…
  • Funding Cryptocurrency, Visa, SEPA, SWIFT
  • Languages English, Spanish, Russian, Vietnamese, Japanese, Mandarin (Chinese)
  • Restricted countries Japan, United States, United States Minor Outlying Islands
  • Products Cryptocurrency, Derivatives
  • Trading platforms Tradingview, Own trading platform Windows + Mac, Webtrader
  • Devices Desktop, Smartphone, Web, Tablet
  • Max leverage 100
  • Order types TSL – Trailing Stop Loss, SL – Stop Loss, TP
  • Support Email, Contact Form, Live Chat
  • Fast Withdrawals
  • Veteran Trading Platform
  • High Security
  • Cryptowatch
  • Performance Analytics
  • Real Stop Loss
Pros

Regulated by the Japanese Financial Service Agency (FSA)
Great security with built-in cold wallet storage
Veteran cryptocurrency exchange with high trustworthiness

Cons

Very slow live chat
Very few payment providers for fiat currencies
Not available in the United States

3.93/5
Trustworthy
Non-Regulated
0.10%
15$
All Traders
Quick Review
  • Established 2017 Malta
  • Type Cryptocurrency Exchange
  • Currencies EUR, USD, RUB, VND, TRY, MYR, THB, INR, PEN, MXN, CHF, COP, SEK, HUF, NOK…
  • Funding Bank transfer, Visa, Neteller, Skrill, Banco Brubank, PayPal, ABA Bank
  • Languages English, Spanish, German, Italian, Swedish, Russian, Turkish, Portuguese, Romanian, French
  • Restricted countries United States, United States Minor Outlying Islands
  • Products Cryptocurrency, Futures, Options, ETF, Derivatives
  • Trading platforms Webtrader, Own trading platform Windows + Mac, Tradingview
  • Devices Desktop, Smartphone, Web, Tablet
  • Max leverage 125
  • Order types SL – Stop Loss, IOC – Immidiate or Cancel, GTX
  • Support Live Chat, Email, Contact Form
  • Leverage Trading
  • Beginner Friendly
  • Daily Gainers & Losers
  • Altcoins
  • Short Selling
  • Customisable Interface
Pros

Great for beginner traders
Biggest Cryptocurrency Exchange
Many Special Features

Cons

Non-regulated
Relatively new platform
Not available for US traders

3.88/5
Trustworthy
Non-Regulated
0.20%
25$
Day Traders
Quick Review
  • Established 2012 Virgin Islands, British
  • Type Cryptocurrency Exchange
  • Currencies EUR, JPY, GBP, USD, CNY
  • Funding Cryptocurrency, Bank transfer, Visa, Mastercard
  • Languages English, Russian, Mandarin (Chinese)
  • Restricted countries Cuba, Korea, Democratic People”s Republic of, Venezuela, Bolivarian Republic of
  • Products Cryptocurrency, Derivatives, ICO
  • Trading platforms Tradingview, Webtrader, Own trading platform Windows + Mac
  • Devices Desktop, Smartphone, Web, Tablet
  • Max leverage 5
  • Order types LO – Limit Order, MO – Market Order, SL –
  • Support Contact Form
  • Automated Trading
  • Paper Trading
  • OTC Market
  • Lending
  • Advanced Trading Tools
  • Professional Trading Account
Pros

Great platform for experienced day traders
Excellent reputation for being a stable cryptocurrency trading platform
One of the oldest surviving crypto exchanges

Cons

Low-quality support
Non-regulated
Very few payment options for fiat deposits

3.82/5
Trustworthy
Non-Regulated
0.10%
25$
Day Traders
Quick Review
  • Established 2017 Singapore
  • Type Cryptocurrency Exchange
  • Currencies USD, EUR, GBP, KRW, JPY, AUD, AED, BGN, CAD, CHF, CZK, DKK, HKD, HRK, HUF…
  • Funding Visa, Mastercard, Klarna, B-pay, SEPA, Apple Pay, iDEAL, PayId, POLi
  • Languages English, Russian, Japanese, Spanish, German, French
  • Restricted countries United States, United States Minor Outlying Islands, Cuba, Iran, Islamic
  • Products Cryptocurrency, Futures
  • Trading platforms Tradingview, Webtrader
  • Devices Desktop, Smartphone, Web, Tablet
  • Max leverage 100
  • Order types MO – Market Order, LO – Limit Order, GTC –
  • Support Live Chat, Email
  • Leverage Trading
  • Demo Account
  • Advanced Trading Platform
  • Investment Product
  • OTC Market
  • Welcome Bonus
Pros

A lot of special features for day traders
Great platform for experienced traders
Demo account for crypto trading

Cons

Non-regulated
Takes time to learn the platform
Relatively new exchange without reputation

3.81/5
Trustworthy
Non-Regulated
0.20%
0$
All Traders
Quick Review
  • Established 2017 Cayman Islands
  • Type Cryptocurrency Exchange
  • Currencies
  • Funding Cryptocurrency
  • Languages English, Spanish, German, Mandarin (Chinese), Korean, Japanese, Vietnamese, Turkish, Indonesian
  • Restricted countries Cuba, Iran, Islamic Republic of, Korea, Democratic People”s Republic of
  • Products Cryptocurrency, Futures, ETF, Options
  • Trading platforms Tradingview, Webtrader, Mobile App Android + Mac
  • Devices Tablet, Desktop, Smartphone, Web
  • Max leverage 100
  • Order types LO – Limit Order, MO – Market Order, SO –
  • Support Email, Live Chat, Contact Form
  • Promotions
  • Lending
  • Investment Product
  • Mining
  • Trading Strategies
  • Trading Bot
Pros

Several products
A lot of trading instruments
Great for investing and day trading

Cons

Non-regulated
Very slow live chat with a long queue
Relatively new platform with a weak reputation

3.78/5
Trustworthy
Non-Regulated
0.075%
30$
Day Traders
Quick Review
  • Established 2018 Virgin Islands, British
  • Type Cryptocurrency Exchange
  • Currencies AED, ARS, AUD, BDT, CAD, CHF, CLP, CNY, EUR, GBP, HKD, HUF, IDR, ILS, INR…
  • Funding Cryptocurrency, POLi, Apple Pay, PayId, B-pay, Visa, Mastercard, Post BillPay
  • Languages English, Russian, Mandarin (Chinese), Japanese, Spanish, Vietnamese
  • Restricted countries United States, United States Minor Outlying Islands, Canada, Singapore, Cuba
  • Products Cryptocurrency, Futures
  • Trading platforms Tradingview, Webtrader, Own trading platform Windows + Mac
  • Devices Desktop, Smartphone, Web, Tablet
  • Max leverage 100
  • Order types MO – Market Order, LO – Limit Order, C –
  • Support Email, Live Chat
  • Rebate
  • Trading App
  • Margin Trading
  • Welcome Bonus
  • Risk Management
  • Fast Execution Speed
Pros

Very high-quality trade interface
Real stop loss and take profit orders
Great live chat support, instant answers

Cons

Non-regulated exchange
This exchange is not for beginner traders
Relatively new exchange

How to Short Bitcoin – Step by Step Guide

Shortselling bitcoin is not more difficult than doing the opposite, buyin the coin.

However, many traders struggle to do this due to a lack of knowledge and also the lack of a proper trading platform.

In this article, you will learn exactly how to short bitcoin and you will get to pick an exchange that suits you.

The general rule of thumb is:

To be able to short bitcoin, you need to trade on a platform with futures, swaps, margin, or leverage.

All of the platforms in above in the comparison table will feature one or more of these.

In order for you to start shorting BTC, you need to first create an account, then find where on the platform you need to go.

All of these platforms allows you to buy crypto with credit card so it’s very easy to get started.

How to short Bitcoin – Step 1

The first thing you want to do is to pick a platform that you like in the comparison table above.

All of the bitcoin trading platforms have some different features so you might want to check out a few before you select a winner.

Some have a more developed trading interfaces and some have a more simple setup.

It all depends on your own level as a BTC short seller and what kind of charting package you prefer.

When you know which platform to use, go ahead and sign up with the exchange.

How to short Bitcoin – Step 2

Now for this step I will give you and example using the KuCoin trading platform.

After you’ve registered go ahead and click the “Futures” button in the main menu in the top left corner.

how to short bitcoin on kucoin

You can either choose the Lite or Pro trade interface.

If you are a beginner trader I definitely recommend that you start shorting bitcoin with Lite.

If you have experience you should try out the Pro interface since it comes with more tools and a full charting package from Tradingview.

How to short Bitcoin – Step 3

Now if you have chosen the Lite trade interface you will see this:

how to short bitcoin on kucoin

As you can see in the highlighted area in the bottom right corner there is a button that says Short.

What you want to do now is to select your position size above the order selection buttons and then click Short.

Conrats!

That’s how to short bitcoin on KuCoin, pretty straight forward.

In my opinion KuCoin is the best trading platform for shorting BTC.

What is short selling – Example

The best way to describe short selling is to say that it’s the opposite of buying.

For example, when you sell BTC short, you are betting on a negative price movement.

Let’s make an example that will help you understand.

The price of bitcoin is trading at 10,000$.

You get a feeling that the market has traded too high, looks weak, and you think the price will drop in the coming days.

You want to profit from this potential negative movement in price, so you decide to short sell bitcoin.

You log on to KuCoin and create an account.

You head over to the Futures section of their trading and place an order in the bitcoin market.

In the next couple of days the price of BTC has fallen to 9500$ and you have made a profit of 500$ which you get to keep once you close the position.

That is the best example I can give you on how short selling works.

Don’t make it to complicated when it’s not.

Can Bitcoin be shorted?

Yes, bitcoin can be shorted on many exchanges.

If you are looking to turn a negative BTC market into profits I suggest that you start by selecting a trading platform from the comparison table at the top.

Once you have done that you can get ready to start going short.

You do this on any crypto exchange that offers futures, swaps, options, leverage, or margin trading in bitcoin.

All of the exchanges above has these features so it’s up to you to pick your favorite.

The reason I’ve chosen these platforms is thanks to their top-level standards on security and user-interface.

You can start shorting BTC knowing that you are trading on a top-rated exchange with a very good reputation.

What does short Bitcoin mean?

what is short trading bitcoin

To go short bitcoin means that you bet on a negative price movement.

You place an order in the opposite direction on your broker and if the price of BTC falls, you make a profit.

It is excatly the same as buying BTC but in the opposite direction.

You don’t need to own BTC before you go short.

The broker you are using has a system where they let you trade with USD, EUR, GBP, or any other fiat currency.

So, the meaning of shorting BTC in the simplest form is to say that you bet that the price will fall.

Can I short Bitcoin on Coinbase?

No you can not short sell bitcoin on Coinbase.

They do offer 3x leverage on their platform but they do not offer to short at all for any cryptocurrency.

In my opinion, I think Coinbase has chosen to no let traders do this on their platform due to the risks involved.

It can be very difficult to successfully short cryptocurrencies in general, and the risks to the other side are almost infinite.

Since many of their traders are beginners they feel that it’s better not to give this option at the moment.

This is only speculation and there might be other reasons as to why shorting BTC is not possible on Coinbase.

And maybe in the future it will be possible, who knows, but for now you can’t.

Where can I Short Bitcoin?

where to short bitcoin

The best trading platforms to short bitcoin 2021 is:

  1. KuCoin
  2. Okex
  3. Binance
  4. Prime XBT
  5. Bitmex
  6. ByBit

These brokers have been hand-picked by experienced traders that know the in’s and out’s of shorting.

By using these exchanges you can be assured that security and functionality is at its best.

You need a good trading interface with proper order selection to limit your risk and open up the potential for profit.

On these platforms you will be able to use limit orders, market orders, as well as stop loss orders to protect your down side.

They also offer bitcoin leverage trading when you are short selling which can be an extra tool to increase profits.

So the next time you ask where can I short bitcoin, your answer is here.

How can I short Bitcoin in USA?

You can short bitcoin from the USA on many different trading platforms that offer margin, futures, or swaps trading in BTC.

As long as the broker accepts USD as a deposit you are good to go.

So if you are from the United States and want to short sell bitcoin I would recommend that you start by looking at the trading platforms at the top of this article.

Here is a list of exchanges where you can short bitcoin from the USA:

  1. KuCoin
  2. Okex
  3. Binance
  4. Prime XBT
  5. ByBit

As you can see the only exchange that doesn’t allow bitcoin shorting from the USA is Bitmex.

The rest you can go ahead and start profiting from the negative price movements in BTC.

How do I make money shorting Bitcoin?

bitcoin short trading

In theory, when you open a short position and the market falls below your opening price, you will profit and make money.

The same goes for making money while shorting bitcoin.

It sounds easy, but when you put it in practice it’s a little bit harder.

To learn how to make money while shorting bitcoin you need a lot of practice and patience.

It’s just like any other skill in life, it has to be learned over time.

What I could say to help you along the way is that to profit from a negative market move you need to have the right timing or a wide stop loss.

In general, most traders fail at making money in a negative market only due to the fact that they have too tight stop losses or the wrong timing.

With the right timing you will be able to have a shorter stop loss, but it’s more difficult.

With a wider stop loss, you need to reduce your position size, but the trading part will be easier and less stressful.

Also, think about why you try to bet on a price fall in the first place, it’s usually because the market is behaving negatively.

So, in order for you to make money while shorting, you first have to be sure that the BTC market is weak.

How does shorting bitcoin work?

It works by having a trading platform with the right trading structure setup.

In essence, you are borrowing money from the broker and then you sell this lot to someone else in the market place.

If the market falls you will make a profit on this borrowed position.

When you close the position you will get to keep all the extra profits, minus commission fees, and the broker will ask for the borrowed money back.

This is why the trading platform that allows shorting of bitcoin always has some kind of margin, swap, future, or options function where there is borrowed money involved.

You will not see a platform offering this with out margin.

So, shorting bitcoin works the same way as when you buy, except that you exchange your current money for a position that you sell to someone else.

This happens in an instant and you don’t have to worry exactly how the technical aspects work.

In theory, it’s not that difficult but most traders get confused with this concept because it seems upside down.

This is understandable but just think of it as a negative bet in the market that your crypto broker lends to you.

When to short sell bitcoin

when to short bitcoin

This is a tricky question and I will try to explain this in detail from my own point of view.

I’ve traded the crypto market for many years and I go long just as much as I go short.

The same goes for my bitcoin trading.

In my early days, I always tried to short sell the tops of the market, with very little success.

The reason why new traders want to do this is that they feel that the risk to the nearest high is so low.

What is really happening is that the market is actually in a positive trend and most traders get caught with their pants down when the market keeps going up.

So most short sellers gets stopped out.

The best time to short sell bitcoin is when the market is weak

This makes sense if you understand how markets work.

They have inertia and when a market is really weak, it tends to stay this way for a long period of time.

So if you can gauge when the market is weak and then try to open your negative positions, you will have a much higher success rate.

Moving Averages indicators are a great tool to help new traders understand when the market is weak or strong.

They a simple lines plotted on the chart that helps you see direction in the market.

Direction can be hard to spot if you are looking at a bar chart or candlestick chart because everything looks so choppy and messy.

Moving Avarages will smooth things out to a simple line with a slope.

Depending on your time frame as a trader you can choose which MA to use to see different trends.

But when you finally learn how to stop weakness in the market you are going to find better success with when to short sell bitcoin.

Try this out and keep the thought of weakness and strength in the back of your head as you are analyzing the market.

General Tips

tips

The best tips I can give you when it comes to short selling bitcoin is that in the beginning, you should use less leverage or margin and a wider stop loss.

This bummed me for years when I started out because I wanted to make these juice profits of 2000$ per trade.

I traded with a big position size and a very tight stop loss but I got stopped out on 95% of my trades.

The trades I got to keep for a while were closed out prematurely because I was not used to seeing such huge profits.

The key to trading success in general is to win over time, not to win big all the time.

When I realized this and I looked at my own trading and shorting I started to move towards a wider stop loss and a smaller position size.

This made everything much easier and I was actually making a lot more money than I did before.

I reduced my position size 10 times and this let me have a stop loss of between 5-10%.

Before I used to have a very narrow stop loss around 0.25% to be able to short bitcoin as heavy as possible.

With my new trading style I managed to score more wins.

Although they were smaller, they started to add up and at the end of the month, I was net plus on my shorting.

So, the best general tip I can give about BTC shorting is first of all to reduce your size and your leverage.

Secondly, widen your stop loss.

This will make life easier and hopefully, you will start to see better progress with a lot of practice.

What are the risks?

risks

There are two major risks to this kind of trading.

  • Tight stop losses
  • No stop losses

Usually when you trade cryptocurrency with leverage the position sizies grows significantly.

It’s only normal to try and utalize all the extra buying power that comes with this feature.

But beware, this buying power seems interesting at first when you start out, only to bite you in the butt if you are not careful.

This is especially true for when shorting BTC.

A bigger position size always comes with a smaller and more narrow stop-loss which minimizes your risk profile in the market.

Your wiggle room, so to say, gets smaller and you can’t handle many pullbacks in the market.

Since the market acts very choppy on a regular basis your position will get hurt badly from these movements if you have a very tight stop loss.

This doesn’t seem like a problem in the beginning but after a couple of weeks trading like this, you are bleeding to death from a thousand paper cuts.

The next big risk with shorting bitcoin is if you are not using much leverage but you skip the stop loss.

The upside risk to a short position is infinite, which means that you could end up losing your account if the market were to go against you for a long time.

Some traders feel that they don’t need to use a stop loss for protection and this can be deadly when you are shorting.

You need sufficient experience to skip out on your stop loss completely, so I recommend all new traders to use it for every trade.

Those are the two main risks, tight stop losses, or no stop loss at all with infinite risks.

My own experience

In my experience I’ve had very good success over the years.

I short sell just as much as I buy the market which opens up a lot of new opportunities in the market.

To be a complete trade you need to be able to take advantage of the negative movements.

But don’t go all crazy on short selling.

Before I learned how to do it well I traded everything on the downside, but that I mean every setup.

This ended up in tragedy because, in the end, I could not keep all these setups in my head so I wasn’t really in tune with the market.

What has worked best for me is to focus on 2-3 really good short setups.

Here are some of my best setups:

  • Big drops after a few days of weakness
  • Large capitulation at the end of a negative move
  • Big positions in a small slow declining market

After a few days of weakness, there is usually a bigger drop when bulls and buyers from before give up.

This is usually near a support line, so watch out for that.

Large capitulation happens at the end of a negative move where the last bulls close out their losses and the most excited short-sellers push the market.

This move can go on for a few days and create large numbers.

A big position in a small market is used when the volatility is relatively low and the market has been showing weakness for a while.

When the market is smaller with lower volatility I can ususally increase my position size and tighten my stop loss a little bit.

As soon as the position is in the green I move my stop loss to positive.

These are my own trading experiences and setups for short selling bitcoin.

Conclusion

In this article, you have learned some great tips for short selling bitcoin along with a couple of new top rated trading platforms for shorting.

Shorting the market can be tricky but if you follow my tips and use a proper bitcoin broker that allows short-selling you may go a long way.

I believe that every trader needs to be able to trade both ways to maximize profits.

So pick your favorite trading platform above and read through my tips and experiences to learn more about how to short bitcoin.

FAQs

No, Coinbase does not allow short-selling for their cryptocurrency trading pairs.

Shorting BTC means that you bet on a negative movement in the market. If you open a short position and the market falls in price, you will make a profit from the decline.

In this article I’ve listed the top-rated trading platforms for shorting bitcoin in 2021:
1. KuCoin
2. Okex
3. Binance
4. Prime XBT
5. Bitmex
6. ByBit

Simply choose any of the trading platforms listed in this review, create and account and follow my step by step guide on how to short bitcoin.