[eemax]

Related to this, does anyone know of a way to bet against bitcoin (or cryptocurrencies in general), without buying cryptocurrencies themselves?

There are lots of more-or-less sketchy cryptocurrency exchanges which allow you to shortsell bitcoin, but these all require buying cryptocurrency in the first place as collateral.

The upshot is that if you bet against bitcoin and win, you win a bunch of... bitcoin. Not so useful if you want to bet on a big collapse of crypto in general.

Selling bitcoin futures seems like a way to bet against bitcoin in the long term, using actual USD, although I don't think that will ever be an option for smalltime investors / individuals.

[modeless]

I recently sold a bunch of Bitcoin, and I believe it will go down, but I would never, ever short it.

When you are long you have limited downside because the price can never go below zero. When you are short your downside is unlimited because there is no limit to how high the price can go.

Bitcoin could easily quadruple in a few months before any crash happens, and your short would probably just be liquidated at a total loss to you even if a crash comes later. As we all know, markets can remain irrational longer than you can remain solvent, and these markets are very irrational right now, as clearly demonstrated by the nonsensical valuation of recent scam Bitcoin forks "Bitcoin Gold" and "Bitcoin Diamond".

[charlesdm]

What is a crash though? Even at current levels, if it quadrupled and then crashes down 50%, is that a crash? Depending on when you acquired your initial position, you might not care much.

Apple added 250bn in market cap this year. The entire crypto space is about 250bn in market cap. That does put things into perspective. Given crypto is completely global, this space is still tiny. Visa has a $250bn market cap.

My assumption is, if it does end up being a massive bubble and mania, it will run high (like the .com bubble -- into the many trillions) but there will a major correction at some point.

But how likely is it that will be any time soon? And are todays prices still cheap then? I would wager digital gold is probably worth more than $150bn in total market cap, even after a major correction.

[kgwgk]

What would you rather own? All the shares of Visa Inc. or every cryptocurrency token in the world?

[charlesdm]

Not exactly the best comparison. Obviously you would pick the shares since they are less volatile -- if they could magically appear in your brokerage account.

However, say I had a net worth of $50m, then I'm quite certain I would rather own $5m in Bitcoin or Ethereum today than own $5m in Visa shares.

[kgwgk]

My point is that if you magically owned Visa tomorrow, you’d be very rich. If you magically owned all those cryptocurrencies tomorrow, would they be worth anything? Why would anyone want to buy them from you?

[jstanley]

Visa is a company and produces profit from people using it, and the people using it don't need to be shareholders, so if you're the only shareholder, you're not reducing the utility for anyone else.

If you own all of the cryptocurrency in the world, nobody else can use it. Obviously it becomes worthless. The same would be true of any currency. That's just a small part of what makes a currency different to a company.

[charlesdm]

Companies are different in comparison to commodities though. That said, you're right -- it is still early, and people aren't exactly sure how much exactly these things are worth. But part of the value derived comes from having a network of people using it.

If tomorrow you owned all the gold in the world and no one would be able to get or buy more gold -- that gold wouldn't be worth much.

[jstanley]

Pointless comparison:

Cryptocurrencies aren't very useful if you own the entire supply.

Visa is still useful even if only one person owns all of the shares.

More interesting would be "if you have $X to invest, at what value of X does it become preferable to buy Visa shares instead of cryptocurrency?"

[kgwgk]

I agree, comparing the total quantity of bitcoin or dogecoin or dentacoin in circulation with the market capitalization of a traded stock (or the valuation of a private company, for that matter) is pointless.

[whiskyant]

Kraken allows you to short-sell. You can use USD on the exchange, so you can immediately short-sell and convert to USD if you want.

https://support.kraken.com/hc/en-us/articles/209238787-Margi...

[empath75]

Yeah if anyone knows how to short these futures for someone with a few grand in his pocket to throw away on a risky gamble, please let me know.

[nissimk]

Interactive brokers accounts can trade cme futures. Whenever these come out it will be just what you're looking for. The margin requirements allow you to short with a lot of leverage too.

Good luck.

[ricardobeat]

eToro let’s you short BTC, Dash, Ethereum, LTC and XRP, though no leverage is available for those, and the spread can be a bit daunting.

Disclaimer: I don’t usually trade crypto there, this is not investment advice.

EDIT: apparently it’s not available in the US.

If you sign up with my referral link we both get $20: http://etoro.tw/2BmqxQb

[eemax]

I should clarify that I am in the U.S... seems like most of these sites are unavailable here.

[ricardobeat]

Oh, sorry. I believe one of the main exchanges (bitsane/bitfinex Maybe?) was going to make options and margin accounts available, don’t remember which one. There’s also cex.io, but it’s in the UK.

I guess you’ll have to wait for JP Morgan’s fund to go live...

[DigitalJack]

I’m sure you could get odds in Vegas, though probably not long terms.

[coupdejarnac]

I'm exploring buying options with the publicly traded Bitcoin based funds. No way do I want to depend on one of the Bitcoin exchanges. Plus, if things really go south, I'm sure I'll still be able to get paid using the stuff on the nyse or nasdaq.

[tome]

Which funds are you looking at? I haven't found any way to reliably trade Bitcoin options.

[incompatible]

Some forex brokers offer bitcoin CFDs, where you can take the short side.

[garmaine]

Why would you do that?

[eemax]

Because it seems like an obvious bubble, with little / no real value?

Bitcoin was / is a pretty cool technological innovation. But the main use-case seems to be buying illegal things or laundering money, and vast majority of transactions are just speculators.

Also, the fact that it is difficult to short is further evidence of a bubble.

[josephagoss]

Two reasons you should not short Bitcoin.

1) Actual legitimate Bitcoin payments are increasing and real.

https://blog.bitpay.com/bitpay-growth-2017/

2) Even if this whole thing does collapse, never short something like Bitcoin unless you have unlimited cash to support such a short. Even if you're right, can you continue to sustain your short if the peak is $100,000 a coin before the collapse? (And the new bottom is $10,000, still higher than right now)

If the price goes there, can you afford the short?

[cinquemb]

There's a dead comment that says this:

>* Traders will devise a suitable risk management plan prior to initiating a short position. Unlike the media driven nonsense about a large activist shorting a bull market permanently, many traders can and do make leveraged long and short trades all the time, with the intention of exiting at a loss if the trade doesn’t go immediately (for some definition of immediately) in their favor. *

In my experience working at prop firm that was trading (speculating) on futures, this is the case. We would enter leveraged short/long positions based on some kind of signals with some kind of risk framework for all assets in the portfolio.

[dnautics]

What about a put instead of a short? There aren't any options markets yet, but that might be interesting.

Also a smart shorter will always put in a stop loss price, but stop losses can slide because cryptocurrencies move fast.

[tome]

I can't find any decent options market. Do you know one?

[dnautics]

If I did I wouldn't have said what I said...

[Nothorized]

How can a single coin attain $100,000 ?

[garmaine]

By someone being willing to spend $100k to obtain one.

I’ve been watching bitcoin since sub-$1 prices. A further 10x increase at some point is not so crazy.

[IAmGraydon]

Good luck with that. I mean no disrespect, but I'm guessing you don't have much experience in this sort of thing if you're asking how to short bitcoin and claiming you've predicted the top of the market when it's been steadily climbing for 7+ years. It doesn't matter what reasoning you've come up with, markets are rarely driven by reason. As a wise man once said, the market can stay irrational longer than you can stay solvent.

If you want to make money, buy BTC. You might win and you might lose, but your odds are far better than if you try to short something that has made a 1000% gain in the last 12 months.

[wslh]

And don't you think that buying illegal stuff is a very large market and enough to make some cryptocurrencies specially interesting?

[eemax]

No, not really. It makes it useful for criminals, and a small number of people who might have good reasons to buy things, but that doesn't mean it should have a market cap of billions.

I'm not saying there are no good uses for bitcoin, of course. For example, if someone used bitcoin to import prescription drugs from Canada to the U.S, that's great. But it doesn't justify a $100B+ market cap, and as it stands, the hard part of doing that is importing the drugs, not exporting the money.

Similarly, just because Tor is useful mostly to criminals and a few human-rights advocates or privacy enthusiasts, I don't expect the Tor Browser to ever gain a major market share.

[wslh]

You are confusing illegal stuff with being a criminal and also subestimating the market size of just the casino industry.

[mirimir]

Yes, gambling is arguably much larger than drugs by mail.

[garmaine]

Ok, so you have no clue about this market and are making investment decisions based off your gut intuition and wild guesses. I’m sure you can find someone willing to sign the other side of that contract. Just don’t hurt yourself or gamble more than you can afford to lose.

[acjohnson55]

Go long in real currency or physical commodities?