How does short selling against the box affect the price of cryptocurrencies?

3 answers

• Heba KamalJan 23, 2022 · 4 years ago
  Short selling against the box can indeed affect the price of cryptocurrencies. When investors engage in this strategy, they borrow shares of a cryptocurrency and sell them in the market. However, instead of using the borrowed shares to close their position, they use their own shares to cover the borrowed ones. This creates artificial selling pressure on the market, which can drive down the price of the cryptocurrency. It's important to note that short selling against the box is a controversial practice and is not allowed in all jurisdictions.
  548

  274
• Jason IsufajJul 08, 2023 · 2 years ago
  Short selling against the box is a strategy where investors sell borrowed shares of a cryptocurrency and simultaneously buy the same amount of shares to cover their position. This strategy can have a negative impact on the price of cryptocurrencies because it increases the supply of the cryptocurrency in the market. When there is an increase in supply without a corresponding increase in demand, the price tends to decrease. Therefore, short selling against the box can contribute to downward price pressure on cryptocurrencies.
  530

  177
• Kent LambMay 14, 2021 · 4 years ago
  Short selling against the box is a practice that can affect the price of cryptocurrencies. When investors engage in this strategy, they create artificial selling pressure on the market, which can lead to a decrease in the price of the cryptocurrency. However, it's worth noting that short selling against the box is not allowed on BYDFi, as it goes against our trading policies. We believe in fair and transparent trading practices that promote a healthy market environment for all participants.
  495

  124