How To Short Bitcoin In Australia: A Useful Guide In 2025
Shorting is a trading strategy in which a trader borrows an asset, sells it, and then buys it back later, aiming to profit from a decline in the asset’s price. While shorting can be a way to capitalize on a downtrend, it is not suitable for every trader.
To engage in shorting, it’s essential to have a solid understanding of trading principles, including order types, candlestick charts, and the specifics of collateral and margin requirements. In this article, we will explore how to short Bitcoin and explain how traders can potentially profit from a decrease in Bitcoin’s price.
BTCC, one of the longest-running crypto exchanges in the world, supports crypto demo trading, crypto copy trading, crypto spot trading for 100+ crypto pairs, as well as crypto futures trading for 300+ crypto pairs with a leverage of up to 500Χ. If you want to start trading cryptocurrencies, you can start by signing up for BTCC.
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What is Shorting?
The term “shorting” in trading originates from “short selling,” a strategy where a trader borrows an asset and immediately sells it, aiming to profit from an anticipated decline in its price.
To close the position, the short seller buys the asset back at a later time. If the price has dropped, they pocket the difference between the selling price and the repurchase price. Essentially, short sellers are betting that the asset’s value will decrease, allowing them to buy it back at a lower price.
In cryptocurrency trading, shorting usually can be done through derivative contracts such as futures and options. These contracts give traders exposure to the price movements of an underlying asset, like Bitcoin, without requiring them to actually own the asset.
What is Shorting Bitcoin?
When shorting Bitcoin, the target is to sell the cryptocurrency at a high price and then repurchase it at a lower price. Unlike traditional traders who seek to buy low and sell high, short sellers reverse this approach, aiming to sell high and buy low. If their prediction is correct and the price drops, they profit from the difference between the price at which they sold the Bitcoin and the price at which they repurchased it.
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How does Shorting Bitcoin Work?
Short selling is a widely used trading strategy where an asset is sold at a high price, typically near the top of a range or resistance zone, with the intention of buying it back or closing the position once the price declines to support levels, the mean value, or during a downtrend.
Traders often employ leverage to increase their position size. While this is common in crypto futures markets, leveraged trading carries high risk and is not recommended for beginners.
Many traders rely on technical analysis, chart patterns, and indicators to identify when the market is overextended, likely due for a correction, or when a resistance zone might trigger strong selling pressure.
There are various methods for shorting Bitcoin, including:
- Spot Margin Trading: This allows traders to borrow assets to trade more than they actually own. Assets like BTC or USDT serve as collateral. If the market moves against the position and a specific threshold is reached, a margin call is triggered, prompting the broker to sell assets to cover losses and borrowing fees.
- Futures Trading: Shorting Bitcoin through futures works similarly to spot margin trading in that it allows leverage, but without requiring Bitcoin as collateral. Instead of trading physical Bitcoin, traders buy or sell contracts that represent BTC and speculate on its future price.
Short selling offers the potential to profit from bearish trends, pullbacks, and mean-reversion setups. It can be applied across various time frames, from 1-minute charts to weekly charts, making it suitable for different trading styles such as scalping and swing trading.
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Can You Short Bitcoin in Australia?
Before start engaging in shorting bitcoin, you need to know whether you can short in Australia. The answer is yes. Traders in Australia can short Bitcoin by selling it and repurchasing it for a profit on any centralized or decentralized exchange that supports BTC margin or leveraged trading. However, it’s important to note that futures trading and shorting with leverage may be restricted in certain jurisdictions due to regulatory limitations.
If you’re planning to short Bitcoin in Australia, it’s recommended to use a platform that is registered with AUSTRAC (Australian Transaction Reports and Analysis Centre) or ASIC (Australian Securities and Investments Commission). These exchanges typically offer enhanced security measures and, in some cases, insurance policies to protect users in the event of a hack or stolen funds.
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How to Short Bitcoin in Australia?
To short-sell Bitcoin, you’ll need a trading account and a well-defined strategy. Here are the key steps to get started:
Open a Trading Account
To short Bitcoin, you’ll need an account with an exchange like BTCC that offers peer-to-peer trading. This ensures you have access to an order book where traders post bids and offers, rather than relying solely on a broker that allows only basic buying and selling.
Understand the Risks of Short Selling
Short selling often involves using leverage. If you plan to trade with leverage, make sure to have proper risk management strategies in place, including setting stop-loss orders, determining appropriate position sizes, and ensuring you have adequate collateral.
Plan Your Trade Execution and Management
Never enter a trade without preparation. Before executing your position, clearly outline your entry point, the reason for entering, your profit targets, and your stop-loss zone—tailored to your risk tolerance. This structured approach helps prevent impulsive decisions.
Stick to Your Plan
Consistency is key in short selling. Stick to your pre-defined plan and avoid entering trades impulsively. Focus on mastering one setup or strategy, such as trend trading on a 15-minute chart. This will increase your confidence and help you spot high-probability setups more regularly.
Take Regular Breaks
Day trading and scalping are high-intensity strategies that require sharp focus. To avoid burnout, be sure to take breaks during active trading sessions. The crypto market operates 24/7, so there’s no need to feel like you’re missing out. Give yourself time to recharge and maintain mental clarity.
Where to Short Bitcoin in Australia?
To short BTC in Australia, you can use exchanges like BTCC, which offers margin trading and futures contracts with a leverage of up to 500x, enabling you to bet on Bitcoin’s price decrease. Fully licensed and regulated in the U.S., Canada, and Europe, BTCC is a well-known cryptocurrency exchange, boasting an impeccable security track record since its establishment in 2011, with zero reported hacks or breaches. BTCC platform provides a diverse range of trading features, including demo trading, crypto copy trading, spot trading, as well as crypto futures trading with a leverage of up to 500x. If you want to engage in cryptocurrency trading in Australia, you can start by signing up for BTCC.
BTCC is among the best and safest platforms to short Bitcoin in Australia. The reasons why we introduce BTCC for you summarize as below:
Industry-leading security
BTCC attaches great importance on security. Since founded in 2011, BTCC has never been hacked or been a victim of any other kind of successful malicious attack, which fully illustrates its security capabilities. Through measures like segregation of assets, 1:1 storage of users’ assets, money laundering prevention and identity authentication and no collateralising tokens for loans, BTCC enjoys good reputation in asset security.
High Liquidity & Volume
BTCC is ranked top 10 by trading volume on both CoinMarketCap and CoinGecko, the world’s two largest crypto information platforms. BTCC prides itself on providing crypto futures trading services to users worldwide with market-leading liquidity, offering perpetual futures on over 300 cryptocurrencies, including BTC, ETH, DOGE, LTC, SOL, XRP, SHIB, etc.
Extremely low fees
Charging high fees means less return for investors. Compared with other major exchanges, BTCC only charges 0.06% for both takers and makers, which are far below the industry average. According to the largest and most recent empirical study on crypto exchange trading fees, the average spot trading taker fee is 0.2294% and the maker fee is 0.1854%.
High and rich bonus
BTCC holds all kinds of campaigns where investors can participate to win exciting bonus. For example, new users can get rewards up to 10,055 USDT coupon through completing relevant missions, like registration, identity verification, first deposits, cumulative futures trading volume, etc. Besides, becoming VIP also can enjoy rewards like VIP-exclusive perks, including discounts on trading fees, access to exclusive campaigns, BTCC merch, priority customer support, fast withdrawal, and many more.
Excellent customer service
BTCC also gains great reputation in terms of customer support. If you are confused or have problem in the process of trading currencies, you can obtain customer support via email and live chat, BTCC offers 24/7 online customer service for you.
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Common Ways to Short Bitcoin in Australia
In Australia, you can short Bitcoin through various methods, each suited to different risk profiles and trading strategies. Below are some of the most popular options:
1. Futures Market
Futures contracts are derivative instruments that allow traders to speculate on the price movement of an underlying asset without owning the asset itself. These contracts are often traded with leverage, amplifying both potential profits and losses.
There are two main types of futures contracts, each with its own characteristics:
-
Quarterly Futures Contracts
These contracts have a fixed expiration date of 3 months. If you hold a position when the expiration date arrives, the exchange will automatically close your position, regardless of whether it’s in profit or loss. -
Perpetual Futures Contracts (Perps)
Perpetual contracts are the most commonly used method for shorting Bitcoin. Unlike quarterly futures, they do not have an expiration date and can be held indefinitely. Billions of dollars worth of perpetual contracts are traded daily.
Futures trading, especially when using leverage, is recommended for advanced traders. Mismanaged trades can quickly spiral into losses, and your collateral may be liquidated to cover the loss.
2. Spot Margin Trading
Spot margin trading is a straightforward way to short Bitcoin by borrowing funds to amplify potential profits. However, it also increases the risk, as losses are amplified if the market moves against your position.
To get started, you need to open and fund a margin account. Most exchanges offer leverage between 3x and 10x, although higher leverage should be reserved for experienced traders due to the increased risk.
For example, if you have a $10,000 account and leverage it at 3x, you now have $30,000 to trade. If you sell 1 BTC at $30,000 and the price drops to $27,000, you’d make a $3,000 profit, compared to $1,000 if you hadn’t used leverage.
However, if the price rises and you do not have a stop loss in place, your entire position may be liquidated to cover the losses.
Additional costs, such as borrowing fees, trading fees, and slippage, should also be considered when engaging in spot margin trading.
In both methods, using proper risk management strategies, including stop-loss orders, is crucial to minimizing potential losses.
3. Using Bitcoin CFDs
Bitcoin Contracts for Difference (CFDs) are similar to futures contracts, with your profit and loss (PnL) calculated based on the price difference between the time you open and close your position.
The main distinction is that CFDs are settled in fiat currency, rather than digital stablecoins or cryptocurrencies like USDT or Bitcoin.
CFDs are typically traded through traditional financial brokers, rather than centralized or decentralized cryptocurrency exchanges. They are considered high-risk investment instruments and are best suited for experienced traders.
A common strategy for trading CFDs is hedging, which involves holding both long and short positions simultaneously. For example, if you have a long futures position, you could short Bitcoin CFDs to hedge your trade and manage risk. If executed correctly, one of the positions will remain profitable regardless of market conditions.
However, hedging is a complex strategy and is not recommended for beginners. It typically does not use stop losses, and calculating the associated risks can be challenging.
4. Binary Options
Binary options are derivative contracts that come in two forms: calls and puts. A put option allows you to speculate on Bitcoin’s price decline, similar to a futures contract.
Unlike futures, losses in binary options are limited to the premium paid for the option contract and cannot increase indefinitely.
To short Bitcoin using binary options, you would purchase a put option that gives you the right—but not the obligation—to sell Bitcoin at today’s price at a specified future date. The price at which you can sell is known as the strike price.
Options are often used for hedging, where traders take both long and short positions to mitigate risk.
However, options can be complicated and are generally recommended for advanced traders or those with experience in traditional financial markets.
5. Leveraged Tokens
Leveraged tokens are derivatives that can be traded on cryptocurrency spot markets, rather than being confined to futures exchanges.
These tokens represent a basket of perpetual contracts and fluctuate based on the underlying futures price movements.
Unlike futures or margin trading, leveraged tokens allow you to short Bitcoin and other cryptocurrencies without the risk of liquidation or the need to manage a maintenance margin.
For example, by purchasing a BTCDOWN leveraged token, you can short Bitcoin with targeted leverage between 1.25x and 4x. This helps maximize profits during downtrends and minimize potential losses during uptrends.
Leveraged tokens offer a simpler way to engage in short selling without some of the complexities associated with traditional futures or margin trading.
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