How to Short Crypto: Four Ways to Capitalize off Market Downturns

The crypto markets have been in a freefall since hitting highs in late 2021. And many folks think things are poised to continue to fall amidst the current crypto winter. Some crypto tycoons like Richard Heart (the guy behind Hex and PulseChain) think this correction could drag Bitcoin all the way back down to $11,000 a token. If that turns out to be true, knowing how to short crypto could be a very lucrative proposition. And we’re here to help.

Just a couple years ago, the idea of Bitcoin hitting $11,000 would be cause for celebration among crypto devotees. But for those that got in at the height of the recent crypto boom, it could feel catastrophic. Which is why we’re going to show you four ways to try and make up some of those losses should Bitcoin continue its downward trajectory.

How to Short Crypto No. 1: Margin Trading

Crypto purists may not be too enthusiastic about centralized exchanges. But crypto’s growing popularity made it a necessary evil to draw in more folks. Anyone that’s stumbled through the annoying process of buying crypto on decentralized exchanges should get it. Plus, they made it easier than ever to trade fiat currency for digital coins.

But in addition to simplicity, most centralized exchanges allow for margin trading. Now typically, margin trading is done to maximize returns on upward movement. However, some exchanges like Kraken and Binance allow folks to borrow tokens outright. From here, folks can then sell those tokens right back on the market.

Eventually, the brokerage is going to want their tokens back though. If the tokens continue to go down in value, that’s not a big deal. You just buy them at the (hopefully) lower price. Then once you return them, you can simply pocket the difference. When it comes to learning how to short crypto, this is probably the easiest. And it doesn’t require signing up for new accounts with another service. You can learn more about margin trading here.

Short Strategy No. 2: Futures Markets

When Bitcoin and its crypto brethren went big in 2017, it grew so popular that a futures market was built around some of the larger tokens. These days, the Chicago Mercantile Exchange (CME) allows folks to short crypto. Here’s how it works…

To short crypto, you essentially sell a futures contract. This is a bet that the price will go down in the future. Here, someone buys the contract from you for the going price of a token. Then when they demand their cryptocurrency contract filled by the seller, he or she would simply buy the tokens at the lower price and fulfill their end of the obligation, pocketing the difference.

These days, it’s not just the CME that offers derivatives trading. Popular exchanges like Kraken, eToro and even TD Ameritrade offer ways to trade futures contracts now. In fact, this might be an even easier way to learn how to short crypto for folks that are unfamiliar with some of the popular crypto exchanges. And if you’d like to learn more about futures trading, just follow this link.

The Big (Crypto) Short No. 3: Inverse ETFs

Those familiar with the stock market should know there’s an ETF for seemingly everything. Betting inflation will continue to rise? There are a whole bunch of them to invest in. Think space travel stocks are about to see a boon in popularity? Look no further than the Procure Space ETF (Nasdaq: UFO). So naturally, there are several of them based on profiting from Bitcoin’s breakdown.

One of the first inverse crypto ETFs to hit the market was BetaPro Inverse Bitcoin ETF, which is traded on the Canadian stock exchange. Since then, the ProShares Short Bitcoin Strategy ETF (NYSE: BITI) has been launched here in the U.S. And there are likely more to follow soon.

And now that you’ve learned how to short crypto the three easiest ways, we’ll close out with one with a bit more of a learning curve…

Short Play No. 4: Prediction Markets

You’re probably aware that you can go to the FanDuel website or pop open the Caesars Sportsbook app on your phone to bet on sports. If you want to try and predict who’s gonna win the Superbowl, the World Series or the World Cup, it’s that simple. Guess right and you can be handsomely rewarded. Well, there’s a similar process for betting on which direction crypto will go.

These prediction markets might fall more in favor with those looking for a pure crypto play too. There are several decentralized prediction markets out there to choose from. Gnosis, for instance, is a platform for prediction market applications on the Ethereum blockchain. PlotX is a cross-chain prediction market protocol. This one makes it so users can make crypto price predictions in hourly, daily or weekly timeframes.

Then there’s Polymarket. This is an outlet for betting on a wide variety of hot topics. Want to make a wager that you know how long Vladimir Putin will stay in power? How about whether Jack Dorsey returning as CEO of Twitter (NYSE: TWTR)? The list of things you can bet on at the Polymarket website is a long one. And naturally, there are all sorts of crypto-related ones.

Here you can bet whether Celsius Network will announce its bankruptcy by July 13? Do you think Ethereum (ETH) will be above $1,200 on July 1? So far, the yes votes are winning. So a bet that it won’t could lead to a tidy payout.

So if you came here wondering how to short crypto, now you’ve got four easy ways to go about it. That being said, we do have some advice…

The Bottom Line on How to Short Crypto

Predicting which way the markets are going to go at any given time is nearly impossible. And that’s doubly true when it comes to cryptocurrencies. At least in the stock market investors have access to a wide array of fundamental information to make a more educated bet. But we don’t quite have the same thing when it comes to crypto.

Sure, we can read the whitepapers, look at trading volume and seemingly follow the influx or efflux of cash toward a given token. But shorting the crypto markets comes with a fair share of risk. The crypto markets are extremely volatile. Sudden increases in price can happen at a moment’s notice.

So just because you know how to short crypto, doesn’t necessarily mean you should. And even if you think you’ve got a hot tip that’s telling you which way crypto prices are going, remember, don’t bet more than you can comfortably lose. Short positions can cost investors a lot of money. They’ve even been responsible closing down some hedge funds. So be careful out there and good luck.

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6 Infrastructure ETFs to Watch in 2022

Infrastructure ETFs offer investors a diversified approach to this lucrative sector. Moreover, the infrastructure industry sits at the brink of global disruption. Investors can get in on companies making the changes that are shifting capital availability, changing environmental priorities and rapid urbanization. Moreover, this presents a unique opportunity for investors to get in early on disruptions in this sector.

List of 6 Infrastructure ETFs

• Global X U.S. Infrastructure Development ETF (BATS: PAVE)
• iShares Global Infrastructure ETF (Nasdaq: IGF)
• FlexShares STOXX Global Broad Infrastructure Index Fund (NYSE: NFRA)
• iShares U.S. Infrastructure ETF (BATS: IFRA)
• SPDR S&P Global Infrastructure ETF (NYSE: SSGA)
• Alerian Energy Infrastructure ETF (NYSE: ENFR)

Below, I’ll go over the highlights for these infrastructure funds below. This includes a description of each fund, the fund’s top holdings and investor returns.

Infrastructure ETFs to Buy in 2022

Global X U.S. Infrastructure Development ETF

Expense Ratio: 0.47%

Holdings: 98

The Global X US Infrastructure Development ETF offers exposure to domestic infrastructure development. The list includes companies with a focus on construction and engineering, raw materials, composites and transportation companies. It also includes companies with a heavy focus on construction equipment production and distribution. It seeks to track the S&P Global Infrastructure Index.

PAVE manages assets worth around $4 billion, making it the largest dedicated infrastructure ETF on Wall Street. Among its holdings are stocks that are publicly traded in the construction materials, heavy equipment, engineering and construction sectors.

The portfolio has a broad scope despite a targeted approach. Global X U.S. Infrastructure Development ETF has about 98 total positions. Some of the company’s top holdings include Nucor, Sempra Energy, Deere & Co., Fastenal and CSX. Moreover, this fund is highly diversified with no assets representing more than around 4% per holding.

Similar to the performance of the rest of Wall Street, the fund has lost about 20% this year so far.

iShares Global Infrastructure ETF

Expense Ratio: 0.43%

Holdings: 75 

The iShares Global Infrastructure ETF offers exposure to companies that provide transportation, communication, water and electricity services. It also seeks to track the S&P Global Infrastructure Index.

The index tracks the performance of the stocks of large infrastructure companies around the world. It contains companies in developed markets around the world. So, you should keep in mind that this fund is not exclusive to U.S.-based stocks. However, nearly 40% of this ETF contains U.S.-based companies. Moreover, some of the international companies in this ETF do business in the states. If you’re looking to invest in a domestic infrastructure ETF, check out the iShares U.S. Infrastructure ETF in the list below.

This fund currently has more than $3 billion in total assets. Its top holdings include Atlantia, Transurban, Enbridge, Aena and NextEra Energy. This fund is highly diversified, similar to the infrastructure ETF above. Its top holding carries 5% of the fund.

This infrastructure ETF is faring well despite ongoing market volatility. The fund is down around 3% so far in 2022.

FlexShares STOXX Global Broad Infrastructure Index Fund

Expense Ratio: 0.48%

Holdings: 220

FlexShares STOXX Global Broad Infrastructure Index Fund seeks to track STOXX Global Broad Infrastructure Index. The index reflects the performance of public infrastructure companies in the developed and emerging markets. It targets loosely-defined infrastructure sectors including energy, communications, utilities, transportation and government outsourcing.

This fund has around $2 billion in total assets. However, this fund is the largest infrastructure ETF in terms of holdings. The fund currently has around 220 holdings. Its top holdings consist of the Canadian National Railway, Canadian Pacific Railway, Verizon, Comcast and Enbridge. Similar to the ETFs above, this fund is highly diversified. Its top holding accounts for 5% of the entire fund.

This fund is in the red so far in 2022 with it being down 12%. However, it’s performing relatively well compared to the rest of the market. The fund’s stability is largely due to this fund’s diversification.

iShares U.S. Infrastructure ETF

Expense Ratio: 0.30%

Holdings: 163

The iShares U.S. Infrastructure ETF tracks the NYSE FactSet U.S. Infrastructure Index. It offers exposure to two groups of infrastructure companies: owners and operators, such as railroads and utilities, and enablers, such as materials and construction companies. So, investing in this fund can provide investors with access to infrastructure companies that may benefit from increased infrastructure activity in the United States.

This infrastructure ETF is smaller than the rest with assets reported around $1 billion. Despite this, this fund is one of the most diversified on this list. It has over 160 holdings in total. Furthermore, each stock in this fund accounts for less than about 1% of the portfolio. So, the wide diversification helps combat market volatility.

This infrastructure ETF is down nearly 13% in 2022. However, this fund is promising long-term with returns of nearly 30% in the last five years. So, this fund should pick up when the market cools down a bit.

SPDR S&P Global Infrastructure ETF

Expense Ratio: 0.40%

Holdings: 75

The SPDR S&P Global Infrastructure ETF seeks to track the performance of the S&P Global Infrastructure Index. The index comprises 75 of the largest publicly listed infrastructure companies.

The index has exposure to companies across transportation, utility and energy infrastructure sub-industries. Approximately 42% of its portfolio consists of industrials and 39% focuses on utilities. The remaining 20% consists of energy stocks.

This infrastructure fund’s top holdings include Atlantia, Transurban, Enbridge, Aena and NextEra Energy. Moreover, this fund is similar to the others with its diversification. The top holding in this fund carries around 5% weight in the fund.

This fund is holding up well with ongoing market volatility with -3% returns in 2022. So, this is one of the promising infrastructure ETFs as the market goes back to normal.

Alerian Energy Infrastructure ETF

Expense Ratio: 0.35%

Holdings: 33

The Alerian Energy Infrastructure ETF targets the Alerian Midstream Energy Select Index. This index includes companies operating in the midstream energy infrastructure sector in North America. It includes corporations and master limited partnerships (MLPs) dealing with pipeline transportation, rail and energy storage and processing.

Approximately 90% of the fund’s holdings are in companies involved in the gathering, processing and transportation of natural gas and petroleum. Its top holdings include Enbridge, Enterprise Products Partners, TC Energy, Energy Transfer and Cheniere Energy. This fund is less diversified than the others on this list with its top three holdings representing over 25% of the fund.

This ETF is in the green so far in 2022 with returns over 6% year-to-date. Moreover, with the rest of the market generally in the red, this presents a huge opportunity for investors looking to get in on diversified infrastructure stocks.

The Final Line on Infrastructure ETFs

Infrastructure ETFs offer investors a diversified, lower-risk approach to investing in this sector. Moreover, investing in disruptors of the industry can produce big returns for investors.

However, make sure to do your research before investing. Returns on investments are never guaranteed and there are always risks with investing. However, this is where doing a deep dive on a fund can make all the difference.

For other infrastructure investment opportunities, check out these infrastructure stocks. There are lots investment opportunities to consider today…

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