The best way is probably to sell BTC futures, if Tether/Bitfinex go down the market will be chaos and won't have the Tether protection team to bid it back up. Those are cash settled and you will 100% get your money. Shorting on any crypto exchange has a lot more counterparty risk.
The easiest is probably through a stock broker. Futures are risky (typically highly levered, though less so for BTC) and they usually make you have a decent chunk of change before they'll give you access.
I have a few brokerage accounts at a few places (Fidelity, E-Trade, Vanguard). Haven't done much margin trading and never worked with futures (done a little with options) so I just don't know what to look for in the interfaces. Is there a "ticker symbol" that represents a future contract for Bitcoin? Are there multiple parties offering such contracts? Is there a broker that you know of who's currently offering these contracts?
Two futures exchanges run Bitcoin contracts, CME (trading under BTC) and CBOE (trading under XBT). They're not a lot different outside of size, CME's contract represents 5 bitcoins while CBOE's represents 1. Here's a decent listing of the differences:
It's definitely worth reading up on how futures work before trading them, but it's similar to stocks in terms of using a ticker[1] and making buy/sell orders. A key difference is margin, but with the volatility of bitcoin both exchanges have really high margin limits so you can't get into too much trouble. The other key difference is you're trading a specific month so you need to be more correct on timing than you would for a stock.
[1] The tickers work a little different than stocks in that the root is XBT or BTC, but the full symbol for the contract includes the month and year. This is similar to options. Your trading platform should make this clear.
I have considered this in the past. The issue is that the kraken order books are rather shallow. Someone could intentionally cause a flash spike and force liquidation of any shorts rather easily, so its far from risk free.
I've had good enough experiences with inter-cryptocurrency trading on Kraken, but I've never actually been able to get their site to let me wire USD in or out of it to a bank account. Always just site errors when I try to do that.
> and if it isn't a fraud it will stay right where it is
I'm not actually qualified to give investing advice. But this part isn't strictly true. In a functioning market, the price could be depressed by the regulatory uncertainty. If that were the case and it was cleared up, you would see the price rise.
We're talking crypto investors here. The ones that preach diversification, and then sell every single one of their alt coins when the bitcoin bubble is deflating.
Tether looks like a good short since if it is a fraud it will go way down and if it isn't a fraud it will stay right where it is.
I'm in the US and would like to short Tether. But I want to get paid if I'm right.