Why is it not recommended to short BTC???
First, retail chips have already been harvested, and the market is basically controlled by institutions.
The situation with Bitcoin is clear now: retail investors have basically exited, and the market is decided by large funds.
Data shows that over 70% of Bitcoin is sitting in wallets that have not been touched for over a year. In other words, these coins are 'tightly held'. The number of retail investors is decreasing year by year, while those large holders with hundreds or thousands of Bitcoins continue to increase their positions!
For example, the chips that should be 'picked up' in the market have already been swept clean by institutions, and retail investors have little to sell. If you want to make money by shorting, you would have to wait for others to panic sell their coins, then buy back at a low price, but that tactic no longer works—because no one is panicking, and no one is selling.
Even more painful data shows: in February 2024, there were still 2.7 million Bitcoins on exchanges, but by February 2025, only 2.1 million will remain, a drop of over 500,000! This means that the circulating Bitcoin is becoming increasingly scarce, and if you want to sell off, you won't even find any 'bricks'.
Second, Bitcoin is not compared with other coins; it is opposing fiat currency.
The competitor of Bitcoin is not Ethereum, gold, or US stocks, but rather traditional currencies like the US dollar and RMB.
In recent years, central banks around the world have been printing money like crazy, and currency devaluation has become the norm. In 2020 alone, the US printed more than half of the dollars in the past 200 years, and inflation has made people's money increasingly worthless.
And what is the biggest highlight of Bitcoin? There will only ever be 21 million coins, and there will be no inflation. It's like the whole world is 'diluting', while Bitcoin remains 'pure and original'. The world economy is unstable, and inflation is hard to control!
Third, there is a group of 'die-hard fans' and miners who become more excited the more it drops.
Bitcoin has a significant difference from other investment products: it is backed by a group of loyal fans and miners who are 'not afraid of death'. They believe Bitcoin will become the 'new currency' in the future. Many are willing to sell their cars and houses to buy the dip; they only buy, not sell, and do not trade short-term. When the market drops, it becomes their opportunity to enter.
Data shows that when Bitcoin rises, the trading volume is not high; when it falls, the trading volume surges. This indicates that many are lying in wait at low levels, ready to jump in as soon as an opportunity arises. Their early costs might be less than 10% of the current price, and the more it drops, the happier they are and the more they dare to buy. This strong bottom support makes shorting twice as difficult.
The logic of Bitcoin is very straightforward: it does not rely on project progress or speculative concepts; it only looks at the macro environment—global economic trends, fiat currency movements, and market liquidity.
Unlike Ethereum, which can crash due to project failures, technical vulnerabilities, or DeFi explosions. Bitcoin's technology is mature, and its fundamentals are very stable.
For example, relying on rumors and creating panic to sell off is almost impossible. Only a black-swan level event, such as a global financial crisis, could potentially shake Bitcoin's price.
But such events are inherently uncontrollable and may lead more people to turn to Bitcoin for hedging. Thus, short sellers find themselves in a dilemma.
The only risk is when everyone thinks it 'won't drop'.
The most dangerous moments in the market often occur when everyone is shouting 'It's stable!' or 'It's taking off!'. When everyone rushes in to buy, the price may suddenly crash, leading to a sharp washout, and as soon as you buy, the market tells you to behave!
The correct way to engage with Bitcoin is to gradually build a position at low levels and hold long-term, not to blindly chase the highs. Understanding the trend and investing rationally is the key.
To summarize: why is it difficult to short Bitcoin?
1. Retail investors have exited, and chips are concentrated in the hands of large holders, making it less effective to sell off;
2. Its true opponent is fiat currency, which has a mountain of problems of its own;
3. There are large numbers of loyal fans and miners ready to buy at low levels, providing a very stable base;
4. The investment logic is simple and clear, making it less likely to be swayed by negative emotions;
5. The real risk is during periods of emotional overheating; long-term investment is the true solution.
