If you short 1BTC, you get the current value of 1BTC and pay the future value of 1BTC. If you buy a 1BTC put option, you pay a premium for the option to get the

If you short 1BTC, you get the current value of 1BTC and pay the future value of 1BTC. If you buy a 1BTC put option, you pay a premium for the option to get the current value of 1 BTC (the usual "strike price") and pay the future value. So for a short: Max loss: Unlimited. if BTC rises to $x, you have to pay $x Max Gain: The current value of 1BTC. If BTC drops to zero. you pay nothing but were given the start value. For a put option: Max loss: The premium, as you don't have to exercise the option Max Gain: strike price minus the premium. Shorts have a fixed period and put options expire, so if the drop you predict doesn't happen in the time you predict, you can get wiped out even if the drop does happen later. So In effect buffet is saying he believes it's going down, but either isn't confident about when or admits there is a chance he's wrong.