No way they cannot short as many as they can !!! The number of futures will be supported by actual number of coins brought by the exchange !!! The ones shorting (whale or minnow) will burn their fingers as they might not sufficient volumes to buy again as price may jump off quickly and the shorter need to cover his shorts for a loss !!!
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its a derivative market, no actual coins being bought or sold... just a representation of the bitcoin price..
Nope !!! So do you think exchanges can provide users sell as many as Microsoft/Amazon more than actual number of shares. This can never happen. Actually exchanges buy and keep them available for future trading or margin trading.