Quick summary: Our recommendation is to use eToro to short Ethereum. 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 ETH, 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 Ethereum 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 Ethereum can be done in 4 easy steps:
1. Choose a cryptocurrency trading platform
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 crypto exchange
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 Ethereum
Now for the actual shorting:
- Starting off at the search bar at the top, find Ethereum 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 Ethereum and click on “Open Trade”.
Once you’re ready to close the trade, hopefully when the value of Ethereum has dropped, go to your Portfolio, find the Ethereum 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 Ethereum!
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 Ethereum (ETH)
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 Ethereum on Binance?
Yes, you can short Ethereum on Binance. They have over 300 cryptocurrencies on offer and specialise in the crypto market. They also have a great app and competitive fees.
Ethereum is an open-source platform that decentralizes applications and it's global. The vision is to create a global computer where anyone can build applications in an open-source manner. All states and data are shared and accessible by all. Ethereum supports smart contract development, where developers can create code to program digital value. Some examples of decentralized apps (dapps), that can be built on Ethereum include token, not-fungible tokens. Decentralized finance apps, lending protocols, decentralized Exchanges, and many other.
In contrast to Bitcoin where Satoshi Nakamoto, the creator of Bitcoin is not known. Vitalik Buterin is one of the founders of Ethereum. Others include Mihai Alisie and Charles Hoskinson as well as Amir Chetrit, Joseph Lubin and Gavin Wood. Jeffrey Wilke is another. Many of the founding members are no longer with the Ethereum Foundation. Some have gone on to work on different projects. Charles Hoskinson is currently working on Cardano, and Gavin Wood on Polkadot.
Ethereum is the blockchain network. Ether (ETH), the Ethereum's native currency, is used to pay for transactions within the Ethereum economy. Ether (ETH) is the base currency for the network and is commonly used to pay transaction fees called Gas.
Every transaction and execution of smart contracts on Ethereum requires a small fee. This fee is known as Gas. Gas is the unit that measures how much computational effort it takes to execute an operation, smart contract or other task. The more complicated the execution operation, the more gas required to complete it. Gas fees are paid entirely using ETH.
The network demand can cause gas prices to fluctuate. The Ethereum blockchain is limited in computing resources so the gas price may rise if more people interact with it. However, if the network is underused, gas prices will decrease. There are other options as well, including Argent, Trust Wallet and Coinbase Wallet.
Ethereum 2.0 is an update that addresses the problem of blockchain trilemma security, scalability & decentralization. Alternative smart contract platforms are highly scalable, but they compromise on decentralization. While a highly secured, decentralized blockchain network would be highly scalable, it would also have high scalability. Ethereum 2.0 is a completely new design. It aims to address these issues through Proof-of-Stake(POS), Beacon Chain Sharding, Sharding and Execution Environment. Because of the complexity of this project, development will be done in three phases. The Proof-of Stake Beacon Chain has been deployed. Users are staking ETH to show their confidence in the upcoming network. To roll out the next phases, research and development continue.