Economy

Financial Experts Have Explained How to Short Crypto on the Market in 2023

Published

2 years ago

25/08/2023

Can You Short Cryptocurrencies? – Contrary to popular belief, shorting cryptocurrencies is possible. While short selling is traditionally associated with the stock market, cryptocurrency exchanges now facilitate shorting options. Traders can take advantage of this opportunity by focusing on cryptocurrencies with high liquidity and consistent trading volumes to minimize the risk of price manipulation. Cryptocurrency markets are known for their volatility, making it challenging to predict price movements. However, by employing short-selling techniques, investors can profit from falling prices without owning the underlying assets. In this article, TU experts explore how to short crypto, including the risks involved and the best strategies to implement.

In simple terms, what does it mean to short cryptocurrency?

Shorting cryptocurrency involves borrowing digital currency from a broker and selling it at the current market price. After the cryptocurrency’s value decreases, the trader buys it back and repays the borrowed funds plus interest to the broker. The profit is the margin between the purchase and sale prices of the crypto.

Shorting Cryptocurrency: Different Ways to Do It

There are various options for shorting crypto. Among them, analysts at Traders Union particularly emphasize the following ones:

Margin Trading: Borrowing funds to enter short positions on cryptocurrency exchanges.
Short-Selling Bitcoin Assets: Selling Bitcoin with the expectation of buying it back at a lower price.
Using Bitcoin CFDs: Trading contracts for difference (CFDs) based on the price fluctuations of Bitcoin.
Futures Market: Engaging in futures contracts that allow investors to short cryptocurrencies.
Binary Options Trading: Speculating on whether the price of a cryptocurrency will increase or decrease within a predetermined time period.
Prediction Markets: Participating in platforms that enable users to bet on the outcome of future events.

To discover the main pros and cons of the above options, read the article prepared by TU.

Step-by-Step Guide on How to Short Crypto

Traders Union experts suggest following their Step-by-Step Guide on shorting crypto. Here is a summarized version of the guide:

Select a reliable cryptocurrency exchange and proceed to register for an account.
Deposit funds using various methods, including debit/credit cards, bank transfers, or cryptocurrencies.
Conduct a thorough market analysis to inform your short-selling decisions.
Select the specific cryptocurrency you wish to short from the derivatives section of the exchange.
Execute the short position, specifying the desired amount and adhering to risk management principles.
Maintain a disciplined approach by following your risk management plan throughout the short-selling process.

Risks and Opportunities of Shorting Cryptocurrency

Shorting cryptocurrencies presents both advantages and risks. On the positive side, it allows investors to profit from overvalued assets and hedge against potential market downturns. However, TU analysts note that price volatility and the lack of regulation in the cryptocurrency futures market pose significant risks. Analysts particularly underscore the importance of conducting comprehensive market research and carefully consider these risks before engaging in short-selling activities.

Cryptocurrency Short-Selling Strategies

To maximize the effectiveness of short-selling, experts suggest traders employ the following strategies:

Technical and Fundamental Analysis: Combine historical price data and trading volume analysis (technical) with an evaluation of a cryptocurrency’s long-term potential (fundamental).
Diversification: Short a variety of cryptocurrencies to diversify your holdings and mitigate the impact of potential losses.
Short-Term Shorting: Take short positions for brief periods, known as scalping, to capitalize on quick profits. This strategy requires a high tolerance for risk and a solid understanding of market conditions.
Caution for Beginners: Shorting cryptocurrencies carries significant risk, making it unsuitable for inexperienced traders. Consider adopting a more conservative approach, such as buying and holding, when starting out.

Conclusion

Short-selling cryptocurrencies can be a lucrative strategy for experienced traders, but it comes with inherent risks. Using borrowed funds amplifies these risks, so Traders Union analysts recommend implementing proper risk management practices, including the use of stop losses. Beginners are advised to exercise caution and gain a thorough understanding of market dynamics before attempting short-selling strategies.

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Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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Economy

Seplat Completes Conversion of Onshore Assets to PIA Fiscal Regime

Published

7 minutes ago

23/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Seplat Energy Plc has completed the conversion of its operated onshore oil and gas assets to the fiscal regime of Nigeria’s Petroleum Industry Act (PIA), marking a major regulatory milestone for the company.

In a statement issued on Tuesday, the dual-listed Nigerian energy firm said its subsidiaries, Seplat West Limited and Seplat East Onshore Limited, finalised the conversion from the former Petroleum Profits Tax framework to the PIA regime following the fulfilment of all technical and regulatory requirements.

The PIA, signed into law in August 2021, was introduced to modernise governance, improve transparency, attract investment, and make Nigeria’s petroleum fiscal framework more competitive globally.

The conversion covers assets previously held under Oil Mining Leases (OMLs) 4, 38, 41 and 53. During the first nine months of 2025, these assets recorded an average working interest production of 42,591 barrels of oil equivalent per day, accounting for approximately 31 per cent of Seplat’s total output.

According to the company listed on both the Nigerian Exchange Limited and the London Stock Exchange, the PIA framework is expected to support increased investment, production growth and improved operational efficiency. The anticipated impact of the conversion had already been factored into Seplat’s medium-term guidance presented at its Capital Markets Day in September 2025.

Seplat noted that it executed Conversion Contracts with its joint venture partners in February 2023 and has since worked closely with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to complete the process. New Petroleum Mining Lease (PML) and Petroleum Prospecting Licence (PPL) numbers have now been issued, with PIA-based operations expected to commence from January 1, 2026, subject to regulatory guidance.

Commenting on the development, Chief Executive Officer Roger Brown said the successful conversion reflects the company’s commitment to regulatory compliance and value creation.

“Conversion to the PIA fiscal regime has been an important focus for Seplat, and we are delighted to have delivered, alongside our respective joint venture partners, the conversion of our onshore operated assets within the timeline outlined at our recent Capital Markets Day,” Mr Brown said.

He added that the transition positions the company for improved profitability and stronger cash flow margins in its onshore business.

Seplat also disclosed that it is continuing efforts to convert its offshore assets to the PIA regime, with a target completion date of 2027.

Economy

NASD Index Rises 0.16% on Renewed Investors’ Appetite

Published

3 hours ago

23/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.16 per cent on Monday, December 22 as investors showed hunger for unlisted stocks.

Trading data showed that the volume of securities traded at the session surged by 532.9 per cent to 12.6 million units from the previous 1.9 million units, as the value of transactions jumped by 64.3 per cent to N713.6 million from N80.3 million, though the number of deals moderated by 13.5 per cent to 32 deals from the 37 deals recorded in the previous trading session.

Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units sold for N16.4 billion, followed by Okitipupa Plc with 178.9 million units worth N9.5 billion, and MRS Oil Plc with 36.1 million units transacted for N4.9 billion.

InfraCredit Plc also finished the trading day as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with the sale of 1.2 billion units for N420.7 million, and Impresit Bakolori Plc with a turnover of 537.0 million units valued at N524.9 million.

The unlisted securities market printed a price loser, FrieslandCampina Wamco Nigeria Plc, which dropped 20 Kobo to sell at N53.80 per share versus last Friday’s closing price of N54.00 per share.

However, the loss was offset by the trio of NASD Plc, Golden Capital Plc, and UBN Property Plc.

NASD Plc gained N5.00 to close at N60.00 per unit versus N55.00 per unit, Golden Capital Plc appreciated by 77 Kobo to N8.45 per share from N7.68 per share, and UBN Property Plc improved by 22 Kobo to N2.43 per unit from N2.21 per unit.

As a result, the market capitalisation increased by N3.38 billion to N2.125 billion from N2.121 trillion, and the NASD Unlisted Security Index (NSI) grew by 5.65 per cent to 3,552.06 points from 3,546.41 points.

Economy

Nigeria’s Stock Exchange Sustains Bull Run by 0.26%

Published

3 hours ago

23/12/2025

Dipo Olowookere

By Dipo Olowookere

The bulls remained on the floor of the Nigerian Exchange (NGX) Limited on Monday, rallying by 0.26 per cent at the close of transactions.

This was buoyed by the gains recorded by 34 equities on Nigeria’s stock exchange, which outweighed the losses posted by 20 equities, indicating a positive market breadth index and strong investor sentiment.

Aluminium Extrusion gained 9.72 per cent to quote at N13.55, International Energy Insurance improved by 9.69 per cent to N2.49, Mecure Industries rose by 9.64 per cent to N60.30, Royal Exchange expanded by 9.60 per cent to N1.94, and Austin Laz grew by 9.50 per cent to N2.65.

On the flip side, Custodian Investment depleted by 10.00 per cent to N35.10, ABC Transport crashed by 10.00 per cent to N3.15, Prestige Assurance weakened by 7.41 per cent to N1.50, and Guinea Insurance slipped by 7.38 per cent to N1.13.

During the session, investors traded 451.5 million shares worth N13.0 billion in 33,327 deals compared with the 1.5 billion shares valued at N21.8 billion transacted in 25,667 deals in the preceding session, showing spike in the number of deals by 29.84 per cent, and a decline in the trading volume and value by 69.90 per cent and 40.37 per cent apiece.

The first trading session of the Christmas week had Tantalizers as the most active with 50.2 million units sold for N127.5 million, First Holdco transacted 32.6 million units worth N1.5 billion, Access Holdings exchanged 27.3 million units valued at N562.3 million, Custodian Investment traded 22.1 million units for N857.8 million, and Chams transacted 21.3 million units valued at N71.1 million.

When the closing gong was struck at 2:30 pm to end trading activities, the All-Share Index (ASI) was up by 401.69 points to 152,459.07 points from 152,057.38 points and the market capitalisation went up by N256 billion to N97.193 trillion from N96.937 trillion.