Bitcoin, the world’s first decentralized cryptocurrency, has been a hot topic of discussion since its inception in 2009. It has become a popular investment option among many investors, including individuals and institutional investors. However, there are some investors who have taken the opposite view and have bet against Bitcoin by shorting it. This article will explain who shorted Bitcoin and why they did so.
Shorting Bitcoin is a way of making money from the decline in the price of Bitcoin. In simple terms, shorting means selling an asset that you do not own with the hope of buying it back at a lower price. To short Bitcoin, an investor borrows Bitcoin from someone else, sells them at the current market price, and hopes to buy them back at a lower price when the price of Bitcoin falls. The difference between the selling price and the buying price is the profit made by the investor. However, if the price of Bitcoin increases, the investor will lose money.
Several prominent investors have publicly stated their bearish views on Bitcoin and have shorted it. One such investor is Michael Burry, who is best known for predicting the 2008 housing market crash. In 2017, Burry tweeted that he had taken a short position on Bitcoin, stating that it was a “speculative bubble” that was bound to burst. He also warned that the rise of Bitcoin was similar to the dot-com bubble of the late 1990s and that it would end in tears.
Another prominent investor who has shorted Bitcoin is Warren Buffett, the billionaire investor and CEO of Berkshire Hathaway. Buffett has been a vocal critic of Bitcoin, calling it a “mirage” and a “gambling device.” In 2018, he reiterated his bearish views on Bitcoin, stating that it had no intrinsic value and that it was a non-productive asset.
George Soros, the billionaire investor and philanthropist, has also been a vocal critic of Bitcoin. In 2018, he called Bitcoin a “bubble” and compared it to the tulip mania of the 17th century. Soros has a reputation for shorting assets that he believes are overvalued, and it is possible that he has also shorted Bitcoin.
Institutional investors have also shorted Bitcoin. For example, in 2018, the investment bank Goldman Sachs announced that it was launching a Bitcoin trading desk. However, in September of the same year, the bank announced that it was abandoning its plans for the trading desk. It is rumored that one reason for this decision was that the bank’s clients were not interested in Bitcoin and that the bank had also taken a short position on Bitcoin.
In conclusion, shorting Bitcoin is a way of making money from the decline in the price of Bitcoin. Several prominent investors, including Michael Burry, Warren Buffett, and George Soros, have publicly stated their bearish views on Bitcoin and have shorted it. Institutional investors have also shorted Bitcoin. Shorting Bitcoin is a high-risk strategy, and investors should carefully consider the risks before taking a short position on Bitcoin.