- Investor Stanley Druckenmiller believes that betting on the downside is more dangerous than betting on the upside.
- Short trading Bitcoin and other cryptocurrencies can be successful and can result in significant profits, while failure can lead to significant losses.
American investor Stanley Druckenmiller, whose capital was assessed by the editors Happy Coin News $6,2 billion, warned newcomers against short-trading assets.
Rich сообщилHe also revealed that in 1999, he shorted internet stocks but still suffered $600 million in losses due to the bursting of the dot-com bubble, which resulted from an oversupply of investment into businesses operating on the then-nascent World Wide Web.
If you’re wrong with a long position, you could lose 100%. If you’re wrong with a short position, you could lose 10 times that amount. Frankly, I’m not sure I’ve ever made a profit on short positions. I’ve never ended up in the red at the end of a year, but I can’t say for sure if short positions have ever made a profit. I like shorting. It’s fun. But you could end up empty-handed. Don’t try this at home,” Stanley said.
Short trading involves borrowing assets, immediately selling them, buying them back at a lower price, and then repaying the debt. For example, someone could have borrowed bitcoins on February 2, sold them at $79,316, then bought them back at the bottom at $60,000, repaid the loan, and kept the difference. Taking into account trading fees and interest, the profit from these trades would have been approximately 24%.
BTC short trading chart
If the asset rises in price, shorting will result in losses, and the trader will have to buy the asset at a higher price to pay off the loan or wait for the price to fall, thereby accumulating debt on the loan. Therefore, the success of shorts depends on the ability to predict the direction of the asset’s price movement, something Druckenmiller believes beginners are poor at.
Risk Warning:
The information on this website is for informational and educational purposes only and does not constitute investment advice or financial recommendations. Cryptocurrencies and digital assets carry a high level of risk, including possible loss of capital. The editors are not responsible for decisions made based on the published materials. It is recommended that you conduct your own research (DYOR) before making investment decisions. Read the editorial policy. https://happycoin.club/about/