Quick summary: Our recommendation is to use eToro to short Cosmos. They have the most popular cryptocurrencies on offer, great support, and have an easy system for shorting cryptocurrencies in general.
While there are a lot of options out there for buying ATOM, shorting is a different story. Luckily for us here in Australia, we do have a few crypto brokers and exchanges that allow for CFDs and shorting.
One of those brokers is eToro, which we’ll be using for this guide. Let’s get started!
How to Short Cosmos in Australia
A quick recap first on what shorting actually is: The main objective of shorting or short selling is to make a profit (of course). The idea is to sell a stock/cryptocurrency hoping it will drop in value so you can buy it back later for cheaper, thus creating a net profit.
Shorting Cosmos can be done in 4 easy steps:
1. Choose a crypto exchange
As mentioned before, for this guide we’ll be using eToro as they offer the ability to short the most common cryptocurrencies.
You can, of course, use any other crypto broker to follow along, they all work very similarly.
2. Create an account on the cryptocurrency trading platform
Let’s start with just signing up with eToro.
The sign-up process is very easy and quick, as is the verification that needs to be completed afterwards so you can get started.
3. Funding your eToro account
Next is funding your account. You have several options when it comes to depositing AUD into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.
4. Short Cosmos
Now for the actual shorting:
- Starting off at the search bar at the top, find Cosmos by entering the name or symbol.
- Then on the crypto page/section, on the right side, hit the TRADE button to enter the trading interface.
- At the top of the trading interface: Click on sell to short sell the stock.
- Enter the amount for which you want to sell Cosmos and click on “Open Trade”.
Once you’re ready to close the trade, hopefully when the value of Cosmos has dropped, go to your Portfolio, find the Cosmos trade, and click on the red cross to close the trade.
If your assumption/prediction was right, then the profit will be added to your account after closing the trade. If you were wrong on the other hand, you’ll incur a loss which will be debited from your eToro account.
Congratulations, now you know how to short Cosmos!
Disclaimer: Trading, investing, and dealing with digital and cryptocurrencies might involve a lot of risks. Their prices are volatile and performance is unpredictable. Their past performance is no guarantee of future performance.
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Where to Short Cosmos (ATOM)
Aside from eToro, the other major exchange you can use is Binance.
While Binance tends to be a bit more complex compared to eToro, they do have more cryptocurrencies on offer.
Frequently Asked Questions
Can I short Cosmos on Binance?
Yes, you can short Cosmos on Binance. They have over 300 cryptocurrencies on offer and specialise in the crypto market. They also have a great app and competitive fees.
The Cosmos network is composed of several independent, parallel Blockchains, called Zones. Each zone is powered using classical Byzantine faulttolerant (BFT), consensus protocols such as Tendermint (used already by platforms like ErisDB). Some zones serve as hubs to allow many zones to work together through a shared hub.
Architecture is a general application of Bitcoin sidechains. It uses traditional BFT and Proof-of-Stake algorithms instead of Proof-of-Work. Cosmos can also interoperate well with other applications and cryptocurrency. You can connect any blockchain system to the Cosmos hub, and transfer tokens back-and-forth between the zones by creating a new area.
Cosmos Hub, a multi-asset distributed ledger is one example of a native token. The atom is another. There are three uses for atoms: as a spam-prevention tool, as staking tokens or as a voting mechanism in governance.
Atoms are used as spam prevention mechanisms to pay fees. The transaction's computation may require a fee. This is similar to Ethereum’s concept of gas. Fee distribution occurs in-protocol. The protocol specification can be found here.
Atoms can "bonded" to earn block rewards by using staking tokens. The staked Atoms determine the economic security of Cosmos Hub. The collateralization of Atoms increases the amount of "skin," and thus the threat to the network. Therefore, the network's economic security is enhanced if more Atoms are bonded.
Atom holders have the power to govern the Cosmos Hub through voting with their staked Atoms.