When you’re thinking about investing in Non-Fungible Tokens (NFTs), you might have one question: Is shorting the NFT market possible? Shorting essentially means that you believe an NFT’s value will drop, so you sell it to someone else before the value drops and then purchase it back after the value has dropped, at which point you hope to profit from the difference between what you sold it for and what you bought it back for. For example, if you borrow 1 NFT from your friend at $1 and then sell it to someone else for $2, you make a $1 profit no matter what happens to the value of NFT in the future. Unfortunately, most people don’t think that the NFT market can be shorted because short sellers have no loans. But it turns out that this is not necessarily true… but does it even matter? Yes, You Can Short NFTs Shorting (Selling First, Buying Back Later) is a common trading strategy employed in traditional and non-traditional markets. By shorting a Non-Fungible Token (NFT), you could, in theory, speculate on undervalued tokens and receive double your returns if you’re right. However, there are significant risks involved with shorting: For one, many NFT tokens are illiquid; it’s hard to find buyers who want to buy out your position quickly and cheaply. Furthermore, if any individual or group of individuals owned enough volume of an illiquid token to manipulate its price against you, they could easily take more than 100% of your money...
