How Are Cryptocurrency Derivatives Used for Hedging? ⎊ Path

How Are Cryptocurrency Derivatives Used for Hedging?

Cryptocurrency derivatives can be used for hedging to protect against losses in a cryptocurrency portfolio. For example, a trader who is long on a particular cryptocurrency can buy a put option to protect against a decline in the price of that cryptocurrency.

If the price of the cryptocurrency does fall, the put option will increase in value, offsetting the losses on the long position.

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