Tagomi, a crypto brokerage and platform based in New York makes it easier for its users to borrow or lend Ether or Bitcoin to facilitate short and long term trades. A report published by Bloomberg on September 12th, 2019 stated that the exchange was committed to making shorting easier by providing real-time access to many counterparties using a single platform.
Current State of Shorting in Cryptocurrency
According to the same report, traders are at the moment required to make a call to various trading desks and brokers for them to confirm the prevailing borrowing rates. The call is also intended to enable them to learn about the risks that may come with moving against the rates during the duration it will take them to place a trade.
Kevin Johnson, the Chief Operating Officer at Tagomi made his views known on the difficulties that may come with applying such trading strategies when it comes to digital assets. He stated that when it comes to other asset classes, this is something that would easily be done in a single click.
But when it comes to the digital assets, the process involved here is not only long, but it also tends to be highly tedious, which makes it difficult for the trader to place a short.
Solving the Shorting Puzzle
Dennis Chou who works at Pantera Capital as a director of trading commented on the shorting puzzle stating that having the ability to short a particular trade is very important to traders. He went on to add that this is not only crucial to people who are interested in betting against a particular digital asset, but as well as to those that would like to hedge, apply a quantitative strategy, or deal in relative-value trades.
Chou commented on this saying that the digital assets marketplace is very volatile. This means that if you are unable to short crypto, then chances are that you are missing certain parts of the puzzle. As was reported by Cointelegraph earlier this year, Tagomi was granted a Bitlicense by the Department of Financial Services in New York.