Top 5 Crypto Exchanges That Allow Shorting

Trading has evolved, and through various trading and investment strategies, one increases the odds of placing successful trades while reducing the risk of losses. But, one method of trading that still allures traders is shorting. 

Shorting or short selling is a trading method in which traders make money by betting over an asset’s price drop. 

Therefore, it gives traders the option to make money from trading in both market directions. 

Now, let’s look at crypto exchanges that allow shorting.

Best Crypto Exchange For Shorting Cryptocurrencies In 2021

(2021's Most Popular Choice)

- Upto 100x Leverage on Bitcoin

- Upto 50x Leverage on other currencies

$90 Joining Bonus

- Upto 125x Leverage on Bitcoin
- Upto 75x Leverage on ETH and other currencies

- 101X leverage on different crypto futures contracts
- Flat Trading Fees

#1. Bybit

Bybit is a global crypto derivatives exchange based in Singapore and is established in March 2018.

It offers to short sell Bitcoin and other supported cryptocurrencies through its Futures marketplace and offers a leverage of up to 100X. 

The exchange boasts high liquidity and is consistently ranked in the top 5 exchanges by trading volume. And has over 1.6 million registered users. 

It offers to trade in inverse perpetual contracts (BTCUSD, ETHUSD, XRPUSD, EOSUSD), linear perpetual contracts (BTCUSDT, ETHUSDT, BCHLINK, LINKUSDT, LTCUSDT, XTZUSDT, ADAUSDT, DOTUSDT, UNIUSDT), and inverse futures contract (BTCUSD quarterly).

Other features of the exchange include an ultra-fast trade matching engine capable of executing 100K TPS, a state-of-the-art pricing system, and a nearly 100% system functionality rate.

The trading fees on the platform are as per industry standards. It offers a maker rebate of 0.025% and charges a taker fee of 0.075%. 

 

#2. PrimeXBT

PrimeXBT is a Seychelles-based multi-asset exchange that specializes in margin trading and is known for providing high leverage across all asset classes. 

The cryptocurrency segment offers margin trading in BTCUSD, ETHUSD, LTCUSD, EOSUSD, ETHBTC, LTCBTC, and EOSBTC. The exchange offers maximum leverage of up to 100X on all trading pairs.

The average trading volume on the exchange is $545 million and has over 12+ integrated liquidity providers with an average trade execution speed of 7.12 ms. 

PrimeXBT also supports trading through the Covesting module, a leading copy trading platform, where you can copy and trade successful trading strategies of professional traders.

The exchange has competitive trading fees with a commission of 0.05% per trade. 

 

#3. Phemex

Phemex is a Singapore-based cryptocurrency exchange that supports both spot and margin trading. It was started by eight ex-Morgan Stanley executives in 2017 and is registered as a Money Services Business (MSB) with the Financial Crimes Enforcement Network Department, which provides credibility to the platform. 

The exchange supports long and short trades in 15 leading cryptocurrencies, including BTC, ETH, DOGE, UNI, ADA, etc. It offers maximum leverage of up to 100X on only BTCUSD contracts and 20X on the remaining contracts. 

Phemex is integrated with 30+ liquidity providers and is one of the fastest trading platforms in the market. The order execution speed on the trading platform is less than 1 ms and can execute over 300K orders per second. 

Other advanced platform functions include FIX API for institutional traders and Sub-Accounts for quantitative traders. 

Regarding trading fees, it offers a maker rebate of 0.025% and charges a taker fee of 0.075%. 

 

#4. FTX

FTX is a Hong Kong-based crypto exchange platform established by Alameda Research (a top global liquidity provider). It is backed by leading crypto firms, including Binance, Bitfinex, FBG Capital, Circle, etc. 

Through FTX, you can short sell a wide range of cryptocurrencies through markets like perpetual and futures markets, BTC options, prediction markets, etc. 

The maximum leverage offered by the exchange is 101X, which can be adjusted according to your trading requirement and goals. 

It has a multi-tiered trading fees structure based on the last 30-day trading volume. In the initial level, Tier-1, with a trading volume of less than $2,000,000, the maker fee is 0.02%, and the taker fee is 0.07%. 

The exchanges charge an additional 0.02% fees for using the leverage of up to 50X and 0.03% fees for using 100X leverage. 

FTT token holders are qualified for a discount of up to 60% on trading fees, based on their quantum of holding. 

 

#5. Binance

Binance is a world-leading crypto exchange platform and supports trading in a wide range of cryptocurrencies in both spot and derivatives markets. 

It provides a best-in-class market depth and liquidity that helps it to execute trades at requested quotes. The exchange gets an average daily trading volume of over $60 billion, twice that of the second-biggest crypto exchange. 

You can initiate short positions in the derivatives segment, where you can trade in USDT margined perpetual futures with 125X leverage, COIN-M Futures- the token margined futures contract with or without expiry with 125X leverage, and Vanilla Options.

Binance has a ten-tiered trading fee rate structure based on 30-day trading volume. The maker fee starts from 0.02%, and the taker fee is 0.04%. The exchange offers a discount of 10% on trading fees on USDT-margined contracts and to users who pay trading fees using BNB tokens. 

How To Short Cryptocurrency?

Because of the high volatility, shorting is a very popular trading method in cryptocurrencies, and one can profit massively from it. 

Let’s see how short trading works in Bitcoin.

For instance, by analyzing technical charts or by any fundamental development, you predict the Bitcoin prices to crash by 5% from the current level. Therefore, you can initiate a short position in Bitcoin to profit from this expected market move. 

Depending on your cash position and available margin, you short sell Bitcoin at the prevailing price. This means you borrow Bitcoin from the market and sell them at the prevailing price. If the price of Bitcoin falls as per your expectation, you repurchase them at that level and settle the position. 

The difference between the selling price and buying price is your net profit. However, while Bitcoin shorting, you need to place a strict stop loss to reduce the risk of losses from probable deviations. 

There are three ways through which you can initiate a short position in cryptocurrencies:

  • Margin trading
  • Futures market
  • Options trading

Conclusion 

As easy or thrilling it may sound, shorting Bitcoin or any other cryptocurrencies is very risky as you trade on the borrowed Bitcoins. And, in adverse conditions like the dramatic rise of the price of Bitcoin and cryptocurrencies, the exchange may ask for additional margin money or square off your position if it falls below the maintenance margin level. 

However, if done with great caution and strict stop loss, one can make money from the bleeding market. Beginners in the market should avoid shorting Bitcoins without any expert guidance or knowledge. And, if you decide to short, only invest money that you can afford to lose. 

You can also use the demo account feature, available with most of the exchange, to practice shorting before placing trades in the live market.

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Jack Bailey

I am John, a veteran trader turned into a trading coach. Especially in the realm of cryptocurrency derivatives which is now booming and expected to grow big.