Would appreciate anyone weighing in on a discussion I had with a CFA. We are both crypto holders and are very bullish on the 2021 outlook however one question we could not find the answer to.
Could bitcoin be perpetually depressed by an establishment ie the FED ( who has been buying corporate bonds to prop up the market and are slowly starting to buy corporate debt) In an effort to discredit crypto currency (Bitcoin) could they not also engage in the unlimited shorting of Bitcoin futures that only need to be settled in FIAT. My understanding of shorting bitcoin is the short seller does not need to borrow the actual underlying asset (Bitcoin) they only need to provide the cash settlement equivalent to Bitcoin’s market price. Because of the limited supply of Bitcoin and the ever growing supply of FIAT, what is stopping a government from filling market orders and driving down the price?