Trying to navigate the exciting world of shorting Bitcoin in DeFi? You're not alone! This guide breaks down the process for beginners, using tBTC and WBTC in a lending/borrowing platform to capitalize on a potential downward trend. What is Shorting Bitcoin? Shorting Bitcoin is a strategy that aims to profit when the price falls. Here's how it works in DeFi:

1. Deposit tBTC: We'll use tBTC (wrapped Bitcoin) because it offers a higher interest rate (APR) due to lower supply on the platform I used Shoebill.

2. Borrow WBTC: With a low lend/supply ratio for WBTC, you might even earn a small APR for borrowing it! Caution: This APR can turn negative, so focus on the price movement, not just the temporary borrowing benefit.

3. Sell WBTC for Stablecoin: Convert your borrowed WBTC into a stablecoin (e.g., USDT, USDC) to lock in your entry price.

4. Buy Back BTC at a Lower Price: When the price drops as expected, purchase BTC back with your stablecoin at a discount, pocketing the difference as profit. Why This Approach? This strategy targets profiting from potential sell pressure from entities like Mt. Gox and the German government. The assumption is they'll sell their Bitcoin holdings regardless of short-term price fluctuations. Important Considerations:

• Market Volatility: DeFi and the crypto market are known for their volatility. This strategy can be risky, so conduct thorough research and have a risk management plan.

• Lending/Borrowing Rates: Don't be swayed solely by a temporary positive borrowing APR. Always prioritize the overall shorting strategy based on market analysis.

• Stop-Loss Orders: Consider using stop-loss orders to limit potential losses if the market moves against your position.

Trying to navigate the exciting world of shorting Bitcoin in DeFi? You're not alone! This guide breaks down the process for beginners, using tBTC and WBTC in a lending/borrowing platform to capitalize on a potential downward trend. What is Shorting Bitcoin? Shorting Bitcoin is a strategy that aims to profit when the price falls. Here's how it works in DeFi:

1. Deposit tBTC: We'll use tBTC (wrapped Bitcoin) because it offers a higher interest rate (APR) due to lower supply on the platform I used Shoebill.

2. Borrow WBTC: With a low lend/supply ratio for WBTC, you might even earn a small APR for borrowing it! Caution: This APR can turn negative, so focus on the price movement, not just the temporary borrowing benefit.

3. Sell WBTC for Stablecoin: Convert your borrowed WBTC into a stablecoin (e.g., USDT, USDC) to lock in your entry price.

4. Buy Back BTC at a Lower Price: When the price drops as expected, purchase BTC back with your stablecoin at a discount, pocketing the difference as profit. Why This Approach? This strategy targets profiting from potential sell pressure from entities like Mt. Gox and the German government. The assumption is they'll sell their Bitcoin holdings regardless of short-term price fluctuations. Important Considerations:

• Market Volatility: DeFi and the crypto market are known for their volatility. This strategy can be risky, so conduct thorough research and have a risk management plan.

• Lending/Borrowing Rates: Don't be swayed solely by a temporary positive borrowing APR. Always prioritize the overall shorting strategy based on market analysis.

• Stop-Loss Orders: Consider using stop-loss orders to limit potential losses if the market moves against your position.