How does shorting crypto differ from shorting traditional assets?

1 answers

• Harsh PrajapatiJun 26, 2025 · 25 days ago
  Shorting crypto differs from shorting traditional assets in terms of the underlying assets and the platforms used for trading. Cryptocurrencies are digital assets that are traded on cryptocurrency exchanges, while traditional assets refer to physical assets like stocks and commodities that are traded on traditional exchanges. The volatility of cryptocurrencies is also much higher compared to traditional assets, which makes shorting crypto riskier. Additionally, shorting crypto often involves borrowing cryptocurrencies from other traders or exchanges, while shorting traditional assets typically involves borrowing shares from brokerage firms. It's important to carefully consider these differences and the associated risks before engaging in shorting crypto or traditional assets.
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