I'm not sure if I understood you correctly as there are multiple ways one can short Bitcoin at the moment if they wish to. But in the end I think we all need to remember that any theory presented by anyone here would only serve as a hypothesis based on speculation. There's no way to prove it as nobody really knows what's going on except those key individuals involved.

Shorting exposes you to effectively infinite upside risk. If you shorted one BTC at $4,000 a few months ago, today you'd have lost almost $5,000. If it goes to $20k again, you could be out $16,000.

It's not like a regular asset, where the most you can lose is what you put in. You could lose literally everything.

In the case of stocks, there is some limit in the sense that there's an underlying asset. There's some dispute as to the real long-term value of a share of Facebook or Netflix or Google, but ultimately there is one: your share entitles you to a piece of the profits of that company. It's still possible to lose a huge amount of money shorting stocks (say, you short a nearly-worthless stock in a drug company whose product is surprisingly approved), but it's very rare.

With bitcoin, there's no underlying value to the asset. That makes it extremely volatile; there's no sound way to guess what it could ultimately be worth. Further, unlike stocks, there's no regulator trying to put a damper on price manipulation. (Basically, every dirty trick that was ever tried in the stock market now has rules against it, but they all get dusted off and tried again.) So shorting BTC puts you at significant risk.

Some people are long on BTC because they think that ultimately there is a real value there, and happens to be higher than the current trading price. Their willingness to do so is what will ultimately determine that long-term price. Shorting it is betting that they're wrong... assuming you have the financial wherewithal to wait for the "long term". Or are willing to assume the risk that you're right in the short term, too.

Because traditionally short positions carry more risks. You would only keep short positions for a long period of time if you have enormous amount of capital to sustain it. Short selling strategies and derivatives were often utilized to artificially deflate prices and conduct “bear raids” on vulnerable stocks.

Wow, it gets better! The police and the army are coiners now too?

This is comedy gold.

If I buy BTC and prices rise enough, I can sell for more than I paid, pay my debt and still keep some. In this scenario the majority of people who did not buy BTC or other less inflationary assets will suffer a lot more than me.