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Can Bill Gates Short Bitcoin?

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Can Bill Gates Short Bitcoin (Shutterstock)

It all started last Monday when Bill Gates was quoted as saying he would short bitcoin if he could on CNBC.

The reaction on social media, particularly twitter was fast and furious.

Tyler Winklevoss responded with this tweet that pointed out that @BillGates could short bitcoin using the CBOE futures contract. The CBOE’s contract specifications clearly state that you could be net short or long up to 5,000 contracts.  There don’t seem to be any restrictions on who can be short (I have to check my notes, I thought at one time there were limitations on who could short – though that may have been at the clearing level – or before bitcoin dropped from almost $20,000 to under $9,000 and hasn’t had a parabolic increase since late November and early December (not coincidentally, in my opinion, right as futures launched).

So my initial reaction was – sure you can Bill (I did meet him once when I was an intern in the 1980’s at Microsoft and I still think that was pretty cool to this day – but that’s another story).

But the more I have thought about this statement, which on the surface seems wrong, the more I think he is on to something.

First, at 5,000 contracts at $8,700 that total short would be $43.5 million.  That is hardly going to move the needle for a man of his net worth.  Even if he was right, he probably makes or loses more every few hours on his existing stock holdings.

So the first conclusion is that maybe Mr. Gates can short Bitcoin, but it isn’t worth it to him – but the rest of us mere mortals can.

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Can Bill Gates Short Bitcoin (Shutterstock)

It all started last Monday when Bill Gates was quoted as saying he would short bitcoin if he could on CNBC.

The reaction on social media, particularly twitter was fast and furious.

Tyler Winklevoss responded with this tweet that pointed out that @BillGates could short bitcoin using the CBOE futures contract. The CBOE’s contract specifications clearly state that you could be net short or long up to 5,000 contracts.  There don’t seem to be any restrictions on who can be short (I have to check my notes, I thought at one time there were limitations on who could short – though that may have been at the clearing level – or before bitcoin dropped from almost $20,000 to under $9,000 and hasn’t had a parabolic increase since late November and early December (not coincidentally, in my opinion, right as futures launched).

So my initial reaction was – sure you can Bill (I did meet him once when I was an intern in the 1980’s at Microsoft and I still think that was pretty cool to this day – but that’s another story).

But the more I have thought about this statement, which on the surface seems wrong, the more I think he is on to something.

First, at 5,000 contracts at $8,700 that total short would be $43.5 million.  That is hardly going to move the needle for a man of his net worth.  Even if he was right, he probably makes or loses more every few hours on his existing stock holdings.

So the first conclusion is that maybe Mr. Gates can short Bitcoin, but it isn’t worth it to him – but the rest of us mere mortals can.

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