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You have to get money into the exchange to purchase and secure your position somehow. BTC is probably an easy way to do it but you could also do it with EUR or USD. You will need BTC to close the position but since you're going to be shorting BTC, you won't want to hold BTC while the position is open, so you'll be holding some form of fiat instead.


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What you fund your account with is irrelevant to this question. If you take a long position against a USD pair, you'll borrow USD and pay USD interest. If you short a Coin you will borrow that coin and pay its interest. Eg. Open long position on BTC/USD for $1000, you'll be borrowing $1000 for your position and would have to pay back $1000 + Interest. If ...


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Its the return rate. So instead of just setting a return rate at lets say 0.019%, you're return rate is the market rate. It updates once an hour. It makes it easier for you so you don't have to log in all the time to adjust you're rate. Imagine. You set a rate to the current market rate of 0.049%. Then you get a few loans but the market rate drops to 0.019%....


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In well regulated markets (Bitfinex's aim) traders should have the ability to profit from movements in both directions. Shorting also assists in the formation of price bottoms. The only way a short seller can capitalize after a down move is by buying back the shorted BTC. This has the net effect of creating buyers after a down move which helps bouy the BTC ...


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Shorting is normal trading transaction on real financial markets. Without shorting you would not be able to speculate and profit on price decline. Assume that btc price is 400 USD and you think that the price will go down. By shorting one bitcoin you simply borrow one bitcoin from some lender and sell the bitcoin for 400 USD. If your assumption is correct ...


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