Bitcoin right now is more of a speculative investment than a currency though, at least until sufficient adoption to dampen the volatility takes place. Which is why I've compared it to other assets, rather than fiat currency. But yes, you are right with the risks of using it as a currency with no intermediary, although the risk is in Bitpay in current situations. How do they deal with this by the way? Are they just speculating that prices will increase?
Honestly, I don't know
But if I were in their place, I would be massively hedging their exposure to price volatility on major exchanges such as Bitfinex or Poloniex, the exchanges which allow shorting. There are many ways to get rid of volatility risks, so it is certainly possible to do. I don't really think that they are speculating since this involves additional risks, and they likely try to diminish risks, not to increase them. For example, if they have 1000 bitcoins as their turnover volume (i.e. they have this amount of bitcoins at any given moment), it makes sense to short at least some part of this volume. In this way, they become safe from abrupt price changes. It will cost them something (rather small percentage) but it is certainly worth doing
Interesting, I wasn't aware you could short Bitcoins. Or do they just sell the ones they get to "short"?
I wonder to what extent they mitigate their risks though. If they can sustain themselves while holding any decent amount of Bitcoins that could potentially mean massive profits.