Short sellers dilemma
Short sellers have a complicated reputation, but they serve an important function in the market. In many cases it is their research that identifies imminent bankruptcies at the very least and outright frauds at best.
But short sellers have had a difficult time in the last 15 years, because in an era of ZIRP (zero interest rate policy) or near-ZIRP, asset prices have only known one direction — up. As a result, even terrible companies and business models have managed to continue a sort of zombie existence — many are still valued at hundreds of millions (or billions) of dollars, with little in the way of revenue to show for it.
How long the market’s irrationality can continue is anyone’s guess. However, I’m here to tell you that if you want to bet against irrationality, the best vehicle may not be to short a particular stock but just to buy Bitcoin. Bitcoin is pure, transparent, mathematical scarcity. As such it stands in contrast to an abundance of nonsense funded by cheap cash. And as more investors realize this, Bitcoin, in the long run, demonetizes irrationality.
