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Maybe they need cash to pay for electricity and hardware, so that they don't spend bitcoin now when it's down.

They most likely went short on Bitcoin when the price was high. This is Bitmain they are not just guessing what the price will be they certainly have projections and they know what a crypto bear market is like. Its a very safe position to short Bitcoin when you have the Bitcoin to cover the shorts if the price goes up.

Maybe there's some subtlety I'm missing. If you have a lot of Bitcoin and you want to short Bitcoin, isn't that just called "selling Bitcoin"?

They most likely are underwriting rolling options, most of which expire unused.

Can you currently buy puts on Bitcoin where your counterparty risk isn't highly correlated to the price of Bitcoin?

Wouldn't that be the case for the above if the option underwriter is guaranteeing possession of the underlying bitcoin?

That is only the case for call options, which isn't the case where you're concerned about counterparty risk correlation with the underlier. For put option, they'll need to guarantee enough cash (or cash equivalents) on hand to pay you out if Bitcoin reaches zero.

The carrying cost (or at least opportunity cost) is high for holding large inventories of cash, so it's not very attractive from a business perspective to do so unless there's either a market or regulatory demand to do so.

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