What Is the Difference between Hedging and Speculation Using Crypto Derivatives?

Hedging is using derivatives to reduce or offset existing financial risk, such as a miner locking in a selling price to protect revenue. Speculation is using derivatives to bet on the future price movement of an asset, aiming to profit from the price change itself.

A hedger uses the derivative to manage risk, while a speculator uses it to take on risk for potential gain.