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how?

The same way you'd earn money shorting a stock. If you "know" the value of something is going to drop - you short it.

Here's a hypothetical:

  1. You borrow 5 ETH from your exchange.
  2. You IMMEDIATELY sell that for $8. (So you currently have $8 in your pocket. Keep in mind you need to return 5 ETH to your exchange. )
  3. You wait for the price of that ETH to drop, you purchase it back - at the lower price, of $4.
  4. You return that 5 ETH to your exchange, and in the process have made $4.

That sounds real confusing for the average person. Glad that someone can make that work, nice! BTC/LTC/ETH have adjust price the last three weekends straight.

Start @ 2 minutes and 26 seconds. This is the most simple example I've come across.