What Are The Benefits Of Shorting NFTs?

Posted by Somendra Kumar on January 13th, 2023

In essence, shorting is when you sell an NFT to another person before you feel its value will decline and then buy it back when you think its value has declined in the hopes of making a profit from the price difference between the two transactions. Both traditional and non-traditional markets frequently use the trading practice known as shorting (selling first, buying back later). In principle, you might bet on discounted tokens by shorting Non-Fungible Tokens (NFT) and profit twice as much if you're correct. To find out all the benefits of shorting NFTs, reach Cryptoknowmics today. 

Risks To Consider

Can cryptocurrency be shorted? Find out from Cryptoknowmics. With shorting, there are substantial risks to consider: One reason is that many NFT tokens lack liquidity; it might be difficult to find purchasers willing to promptly and cheaply take over your holdings. Moreover, they could simply carry more than 100% of your money if a single individual or group of individuals controlled enough volume of an inaccessible token to influence its price against you. Market makers (those people/bots who establish prices when no one else wants to buy or sell) could still distort their books to reduce short sellers' earnings even when short-selling feels right from a long-term investing standpoint.