A bitcoin embassy is seen in an underpass in Bydgoszcz, Poland.

The first week of Cboe's bitcoin futures trading was relatively stable, except for a sudden drop Wednesday afternoon.

It turns out that was the same day one of the largest brokerages trading the futures, Interactive Brokers, began allowing clients to short, or bet against, the futures.

"The introduction of short sales was necessitated by the large premium of the January futures contract over the price at which Bitcoin trades on the physical venues," Interactive Brokers founder, Chairman and CEO Thomas Peterffy, said in a release Wednesday.

On Tuesday, Cboe's January bitcoin futures contract settled at $18,020. In contrast, the digital currency was trading more than $500 dollars lower on major digital currency exchanges. Bitcoin settled Tuesday at $17,395 according to Gemini's daily price auction, which Cboe's contract is based off of. Bitcoin traded that day at $17,178, according to CoinDesk's bitcoin price index.

Difference between Cboe January bitcoin futures contract and CoinDesk bitcoin price index

Source: Cboe, CoinDesk

The launch of bitcoin futures on the Cboe Futures Exchange Sunday marked the cryptocurrency's first derivatives contract on an established exchange. Many saw it as a step towards establishing bitcoin as a legitimate asset class, potentially paving the way for a bitcoin exchange-traded fund.

Also on Wednesday, DoubleLine Capital CEO Jeffrey Gundlach said midday on CNBC's "Halftime Report" that "if you short bitcoin today, you'll make money," although he acknowledged it could trade higher in the short term.

The Cboe bitcoin futures then fell 10 percent, briefly triggering a price halt, and settled more than 5 percent lower in their worst trading day since the launch. The futures had soared nearly 20 percent in their first day of trading. They were trading 7.5 percent higher at $18,060 late Friday morning.

When the bitcoin futures launched Sunday evening, Interactive Brokers had not allowed clients to short the product "due to the extreme volatility of cryptocurrencies," according to a Monday release. Peterffy stated that "Interactive Brokers was on the buy side of the low print of $14,710."

Interactive Brokers said that it handled just over half of the bitcoin futures trading volume the day of their launch. Updated figures were not yet available as of Friday.

CME, the world's largest futures exchange, is set to launch its own bitcoin futures contract Sunday evening. Interactive Brokers said Friday that it plans to let customers bet on and against the CME contract.