What do you mean?

Shorting doesn’t change the amount of Bitcoin unless exchanges are rehypothicating Bitcoin to lend to short sellers.

Short selling means you borrow the asset to sell it on the open market predicting it will fall in price so you can buy it back later at a lower price to return it and pocket the difference.

Say you borrow 1 bitcoin from me at 70k and sell it. You now have 70k and no bitcoin but you owe me 1 bitcoin. Bitcoin price drops to 65k so you buy 1 bitcoin and give it to me and keep the 5k difference.

There is a cost to shorting. It depends on market demand for shorting it could be very expensive or fairly inexpensive. You would pay me interest monthly for however long you have borrowed the asset.

This is a very basic explanation.

In the case of the funds who buy the etf they are doing something called a cash and carry trade. They buy the spot etf and sell futures contracts (which is similar to shorting) but in this case because there is a lot of demand to go long futures they collect the interest premium instead of paying it.

Ultimately this should be net neutral to price unless exchanges are pulling some funny business. But because they are hedged it does hamper the ability for price to skyrocket on spot etf buying because a lot of the buying is offset by futures selling.