Summary: Shorting Ripple is pretty straightforward, all you need is a cryptocurrency exchange that allows for short selling. While there are a few exchanges out there that have added the ability to short crypto, our recommendation is to use eToro. They’re well-known, have a global presence, and are trusted by millions of users from 100+ countries.
We’ll be using eToro in our guide, you can sign up with one of the sign-up buttons below.
Before we get started, let’s quickly explain what shorting is (for those that are new to it). Shorting is the practice of selling a cryptocurrency hoping it will drop in price so you can buy it back later for cheaper… which, if successful, will give you a net profit.
It might sound a bit complex but don’t worry, it’s a lot easier than you might think.
How to Short Ripple
Shorting Ripple can be done in 4 steps:
- Find a cryptocurrency trading platform
- Sign up with the exchange
- Fund your account with fiat or crypto
- Short Ripple
1. Find 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 cryptocurrency exchange that allows for short selling.
2. Sign up with the crypto trading platform
Let’s start with creating an account on eToro.
The sign-up process is very 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 deposit methods to choose from when depositing funds into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.
4. Short Ripple
These are the steps to follow to execute a short sell:
- Go to the search bar at the top, find Ripple by entering the name.
- 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 the crypto.
- Enter the amount for which you want to sell Ripple and click on “Open Trade”.
Once you’re ready to close the trade, hopefully when the value of Ripple has dropped, go to your Portfolio, find the Ripple 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 Ripple!
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 Ripple (XRP)
Aside from eToro, the other major exchange you can use is Binance.
While Binance tends to be a bit more advanced when compared with eToro, they do have a lot more digital assets to trade with.
Frequently Asked Questions
Can I short Ripple on Binance?
Yes, you can short Ripple on Binance. They have over 300 cryptocurrencies on offer, have a decent phone app and a lot of advanced trading features.
Ripple is an privately-held fintech firm that offers a global solution for payment via its RippleNet (also known as RippleNet). RippleNet is a network of payment networks that are built on Ripple’s consensus leadger, XRP Ledger. (also known under XRPL). Ripple funded open-source XRP Ledger development.
Ripple connects banks, financial providers, and digital asset exchanges. This is unlike other cryptocurrencies that are geared towards peer-to-peer transactions.
Ripple developed the open-source distributed ledger XRP Ledger (XRPL). XRP is a native cryptocurrency to the XRP Ledger.
XRP transactions work in a different way to Bitcoin (BTC), where transactions are processed and protected by proof of work mining.
Ripple transactions will be publically recorded on its distributed open-source consensus ledger. The data structure of Ripple is very similar to that of a blockchain. Each successive block in the data block includes a hash. It has a different consensus system than Ethereum or Bitcoin. It does NOT rely on Proof of Work (PoW), and there is no mining involved in XRP.
Instead, XRP is based on a consensus algorithm known to be the Ripple Protocol Consensus. The integrity of the XRPL is maintained by a group trusted nodes. To achieve consensus and to be included in XRP Ledger it must be approved by a supermajority among these trusted nodes.
XRPL uses a completely different set of rules: the Ripple Consensus Protocol Algorithm, (RCPA). The RCPA explains how XRPL are managed by a network consisting of independent Ripple validator nosdes. At least 80% must verify any Ripple transaction.
Anyone can become an official validator. Ripple does have a trusted list of validators. This trusted list is known by the Unique Node List, (UNL).
Alice could send 1,000 Japanese Yuen to Bob her cousin in India. The JPY is converted to XRP and validated by network servers. Bob could withdraw his money in Indian Rupee after validation. It takes only seconds to send the money.
Ryan Fugger, the creator of RipplePay and the first version thereof, started Ripple in 2004. Fugger handed the coin to Jed McCaleb & Chris Larsen in 2012, where they cofounded OpenCoin. OpenCoin was then rebranded to Ripple Laboratories Incorporated in 2013. Ripple Labs Incorporated was rebranded in 2016 as Ripple. Chris is currently Ripple's Executive Chair.
Jed McCaleb is the former founder of Mt. Gox, which was the first Bitcoin-exchange. He had a dispute with Ripple, and forked Ripple to launch Stellar. He is currently Stellar's CTO.
Ripple CEO Brad Garlinghouse currently