I am confused about shorting Bitcoin on BitMEX since your profits are paid to you in BTC rather than USD.
Let's say I have 1 BTC. I then deposit it to BitMEX and use all of it to short BTC at 1x leverage when it's $10,000. BTC's price then falls to $5,000 and I close this short.
I understand that I would have profited $5,000 in USD. However, since Bitcoin is now only worth $5,000, I would be paid 1 BTC extra from BitMEX. i.e. I now own 2 BTC.
However, since BTC is only worth $5,000 now wouldn't that mean I still have $10,000 worth of Bitcoin?
This definitely does not seem correct but I can't find the flaw in this example.
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