How does short selling differ from long selling in the context of cryptocurrency trading?

1 answers

• bg seenivasababuFeb 22, 2025 · 6 months ago
  Short selling and long selling are two different strategies used in cryptocurrency trading. Short selling involves selling a cryptocurrency that the trader does not own, with the expectation that its price will decline. This is done by borrowing the cryptocurrency from a third party, selling it at the current market price, and then buying it back at a lower price to repay the lender. The profit is made from the difference between the selling and buying prices. On the other hand, long selling is the strategy of buying a cryptocurrency with the expectation that its price will increase over time. Traders hold onto the cryptocurrency and sell it at a higher price to make a profit. Short selling is considered more risky and complex compared to long selling, as it requires accurate predictions of price movements and the ability to act quickly. Long selling is a more traditional approach that aligns with the belief in the long-term potential of cryptocurrencies.
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