2018 was an awful year for BTC holders: Bitcoin lost over 80% of its peak value. While some people lost money, there were many who made money by shorting Bitcoins. Institutions were not involved in crypto at that stage, which leaves us with wealthier liquidity holders, who had a reason to believe (very strongly) Bitcoin would not rise.
The way “short selling” works is similar to sale of a security that the seller has borrowed. Imagine yourself buying a car with a payment obligation in 12 months at the market price of this car in 12 months. If you are confident this car will cost less in 1 year, you enter this trade and gain from price difference between buying now and an obligation to buy in 12 months. However if the car price will increase in 1 year, you will still have to pay the market price, which will generate loss to short trader.
Now, to start with, being able to borrow Billions in Bitcoin says you have access to Bitcoin crypto whales with huge amounts of crypto on hand, which they do not wish to sell. And who would put millions betting on Bitcoin depreciation? Well, my take – same people who lent the Bitcoin volumes.