What Financial Derivative Could a Miner Use to Hedge against a Drop in the Cryptocurrency Price? ▴ Learn

What Financial Derivative Could a Miner Use to Hedge against a Drop in the Cryptocurrency Price?

A miner could use a short position in a cryptocurrency futures contract or purchase a Put option on the cryptocurrency. Selling a futures contract locks in a future selling price for the coins they expect to mine.

Buying a Put option gives them the right, but not the obligation, to sell their mined coins at a predetermined price (the strike price), protecting them from a significant price decline.

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