How to hedge Bitcoin

BTC is Bitcoin token.

As BTC is a volatile asset, in certain instances it will require hedging.

The best method of hedging BTC is to use crypto derivatives.
There are multiple of the exchanges serving futures and perpetual swaps.

Choose from the list of hedging options

Bitcoin Futures

When required to hedge the position for the mid-term period (weeks to months) you can use futures.

Exchange Symbol Premium (-)
Discount (+)
Spread Open Intrest 24h Volume Expiry Date
BTCC Futures BTC-WEEKLY -0.151 0.03 616,530,635 1,126,167,276 1/7/2022
BTCC Futures BTC-DAILY -0.185 0.03 83,103,597 151,782,137 27/6/2022
Binance (Futures) BTCUSD_220930 -0.370 0.01 130,993,400 100,616,173 30/9/2022
Huobi Futures BTC_CQ -0.056 0.01 14,321,600 64,773,351 30/9/2022
Binance (Futures) BTCUSD_PERP -0.099 0.11 1,635,700 62,305,943 25/12/2100
Huobi Futures BTC_NQ -0.765 0.01 15,370,400 46,551,669 30/9/2022
OKX (Futures) BTC-USD-221230 -0.747 0.07 185,905,300 28,377,383 30/12/2022
FTX (Derivatives) BTC-0930 -0.159 0.02 189,620,100 27,998,293 30/9/2022
Binance (Futures) BTCUSD_221230 -1.240 0.01 11,450,300 26,670,992 30/12/2022
Huobi Futures BTC_NW 0.195 0.19 3,278,200 26,067,790 1/7/2022
OKX (Futures) BTC-USDT-220701 -0.011 0.02 1,959,300 22,082,544 1/7/2022
Huobi Futures BTC_CW 0.001 0.04 3,538,600 21,510,204 1/7/2022
OKX (Futures) BTC-USD-220701 0.020 0.01 57,613,000 18,809,961 1/7/2022
OKX (Futures) BTC-USDT-221230 -1.095 0.04 8,333,100 15,047,399 30/12/2022
OKX (Futures) BTC-USD-220708 -0.114 0.04 15,826,800 13,730,755 8/7/2022
OKX (Futures) BTC-USDT-220708 -0.126 0.05 1,456,900 10,480,195 8/7/2022
FTX (Derivatives) BTC-1230 -1.177 0.09 33,335,727 10,371,777 30/12/2022
Huobi Futures BTC_NW -0.074 0.03 3,077,100 8,013,114 8/7/2022
Deribit BTC-30SEP22 -0.084 0.03 200,918,920 4,448,463 30/9/2022
Deribit BTC-8JUL22 0.011 0.08 1,953,050 3,422,591 8/7/2022
Deribit BTC-1JUL22 0.004 0.02 18,123,510 2,368,624 1/7/2022
Deribit BTC-29JUL22 -0.020 0.10 25,057,690 2,077,161 29/7/2022
Deribit BTC-30DEC22 -0.565 0.09 70,196,360 1,500,474 30/12/2022
Deribit BTC-26AUG22 0.171 0.13 3,260,420 1,402,864 26/8/2022
Deribit BTC-31MAR23 -1.244 0.23 58,190,920 1,287,175 31/3/2023
Deribit BTC-30JUN23 -1.765 0.57 161,230 24,220 30/6/2023

Bitcoin Perpetual Swaps

Short position for indefinite time is also possible by using perpetual.
Moreover you can earn swaps in particular cases.

Exchange Symbol Premium (-)
Discount (+)
Spread Funding Rate Open Intrest 24h Volume
Binance (Futures) BTCUSDT 0.001 0.01 0.00783 2,037,247,814 9,330,937,187
MEXC Global (Futures) BTC_USDT 0.048 0.01 0.01280 1,438,865,457 1,269,498,594
Gate.io (Futures) BTC_USDT 0.134 0.01 0.01000 970,383,193 589,500,855
FTX (Derivatives) BTC-PERP 0.005 0.01 -0.01200 964,253,514 1,791,167,277
BTSE (Futures) BTCPFC 0.118 0.01 0.00000 944,733,661 163,788,309
Prime XBT BTC/USD 0.000 0.05 0.00000 868,225,000 535,619,834
Bybit BTCUSDT 0.013 0.01 0.00890 741,537,361 3,069,439,381
BTCEX (Futures) BTC-30SEP22 -0.279 0.03 0.00820 675,882,738 782,044,038
AAX Futures BTCUSDTFP 1.448 0.03 -0.01699 674,844,989 965,945,802
Bitget Futures CMT_BTCUSDT 0.008 0.02 -0.00136 650,218,862 2,589,428,358
C-Trade BTCUSD -0.034 0.01 0.01000 604,502,292 3,979,907
BTCEX (Futures) BTC-24JUN22 0.078 0.06 0.01000 600,632,539 1,089,317,456
Deribit BTC-PERPETUAL -0.081 0.01 0.00366 414,352,190 123,041,061
Bitfinex (Futures) TBTCF0:USTF0 0.175 0.12 0.00000 413,715,764 72,274,942
Bybit BTCUSD 0.035 0.01 0.00820 407,284,462 805,195,738
Binance (Futures) BTCUSD_PERP -0.010 0.01 0.00088 393,161,800 2,505,682,975
BitMEX XBTUSD 0.006 0.01 0.00000 343,574,300 405,676,611
ZBG Futures BTC_ZUSD 0.142 0.01 -0.00543 323,785,733 1,118,552
C-Trade BTCUSDT 0.095 0.01 0.00000 321,528,152 3,009,065
OKEx (Futures) BTC-USDT-SWAP -0.032 0.01 0.00748 295,259,300 4,325,657,815
KuCoin Futures XBTUSDTM 0.049 0.01 0.00780 291,758,999 971,334,527
BTCMEX BTCUSD 0.084 0.00 0.01000 289,778,991 2,143,017,004
BTCMEX BTCUSDT 0.050 0.00 0.01000 289,778,991 572,722,079
Binance (Futures) BTCBUSD 0.002 0.01 -0.00276 285,214,001 1,463,110,426
Crypto.com Exchange (Futures) BTCUSD-PERP 0.018 0.03 -0.00001 264,892,352 264,892,352
Phemex (Futures) BTCUSD -0.009 0.01 0.01000 231,725,649 1,462,204,068
AAX Futures BTCUSDFP 1.529 0.06 -0.00401 208,736,518 297,901,400
OKEx (Futures) BTC-USD-SWAP -0.019 0.01 -0.00814 205,257,500 679,545,460
BTCC Futures BTCUSDT -0.195 0.03 0.00000 193,269,976 353,017,251
BitZ (Futures) 101 0.023 0.12 0.00000 147,712,494 2,328,854,320
Bitfinex (Futures) BTCF0:USTF0 -0.069 0.03 0.00900 128,234,427 15,570,834
Huobi Futures BTC-USDT 0.027 0.01 0.01000 127,372,568 220,404,545
MXC (Futures) BTC_USD 0.018 0.06 0.02000 111,583,200 1,212
ZBG Futures BTC_USDT 0.099 0.01 -0.00734 105,381,963 1,422,049
Bitrue (Futures) BTC-USDT 0.044 0.01 0.01760 105,351,647 821,564,727
dYdX Perpetual BTC-USD 0.140 0.02 -0.00000 80,448,154 92,488,452
MXC (Futures) BTC_USDT -0.023 0.03 0.00297 63,213,940 113,293,123
Huobi Futures BTC-USD 0.058 0.01 -0.00159 54,313,300 70,997,553
MyCoinStory BTCUSDT -0.016 0.02 0.01000 51,117,733 18,546,549
MCS BTCUSDT -0.159 0.12 0.01000 50,901,999 13,793,324
KuCoin Futures XBTUSDM 0.071 0.02 0.01000 34,106,359 14,995,003
Phemex BTCUSD -0.058 0.10 0.05913 31,597,323 341,056,663
Kraken (Futures) PI_XBTUSD 0.010 0.08 -0.00004 25,866,826 38,124,368
Bitget Futures BTCUSD 0.004 0.01 0.00469 22,994,034 89,974,754
Gate.io (Futures) BTC_USD 0.053 0.01 -0.00890 22,125,957 5,297,998
BitZ (Futures) 201 -0.009 0.13 0.00000 17,312,302 268,684,298
BaseFEX BTCUSDT -0.079 0.04 0.01000 17,272,631 18,032,837
Bitforex (Futures) SWAP-USD-BTC 0.138 0.01 0.01127 16,578,353 1,031,921,995
CoinFLEX (Futures) BTC-USD-SWAP-LIN 0.000 0.05 0.00080 9,429,642 11,541,987
dYdX Perpetual PBTC-USDC 0.090 0.05 0.00001 7,554,375 1,121,936
Hopex BTCUSDT 0.016 0.00 0.00000 7,235,078 229,410,285
CoinEx (Futures) BTC-USDT 0.011 0.01 -0.07351 6,428,698 136,636,120
BitZ (Futures) 1 0.055 0.11 0.00000 5,427,012 84,214,110
ZB (Derivatives) BTC_QC -0.095 0.05 0.01000 5,095,310 18,614,382
Kumex XBTUSDM -0.052 0.11 0.01000 4,542,007 12,254,524
BitMEX BCHUSD -0.071 0.05 0.02690 4,286,551 2,071,978
Drift Protocol BTC-PERP 0.000 0.00 0.12668 4,226,706 0
Bit.com BTC-PERPETUAL 0.197 0.02 0.00000 4,090,270 6,338,440
WOO Network (Futures) PERP_BTC_USDT -0.029 0.01 0.00026 3,896,685 43,467,603
ZB (Derivatives) BTC_USDT 0.006 0.09 0.01000 3,640,946 1,155,448,392
Deribit BTC_USDC-PERPETUAL 0.124 0.05 -0.00002 3,060,731 6,040,289
Perpetual protocol BTC_USDC 0.000 0.00 -0.02000 2,913,536 0
MEXC Global (Futures) BTC_USD 0.106 0.01 0.01570 2,753,000 120,205
Bit.com (Futures) BTC-PERPETUAL -0.337 0.05 0.00000 2,715,550 511,330
BitMax (Futures) BTC-PERP -0.105 0.00 0.04963 2,439,673 7,922,145
Hopex BTCUSD -0.018 0.00 0.00000 2,091,350 3,430
BitZ (Futures) BTC_USDT -0.001 0.03 0.00000 2,082,641 11,464,759
AscendEX (BitMax) (Futures) BTC-PERP 0.173 0.00 0.01235 2,007,273 1,821,292
Kumex XBTUSDTM 0.058 0.11 0.01000 1,999,642 1,926
CoinEx (Futures) BTC-USD -0.047 0.03 -0.02383 1,525,801 8,094,763
Bithumb (Futures) BTC-PERP -0.099 0.13 0.04236 1,300,023 7,381,074
BigONE Futures BTCUSD -0.122 0.02 0.05129 1,167,358 20,225,076
Kraken (Futures) PI_BCHUSD -0.531 0.27 -0.39536 935,901 91,520
dYdX Perpetual (L1) PBTC-USDC 0.128 77.50 0.00000 843,580 410,367
BigONE Futures BTCUSDT 0.014 0.02 0.01000 481,475 95,823,271
Crypto.com Exchange (Futures) BTCUSD-220325 0.086 0.05 0.00000 415,158 359,471
BaseFEX BTCUSD 0.013 0.04 0.01000 314,593 3,087,350
Crypto.com Exchange (Futures) BTCUSD-220225 0.234 0.22 0.00000 291,801 203,876
MCDEX (BSC) BTC-BUSD 0.000 0.72 0.02270 106,926 2,109
Crypto.com Exchange (Futures) BTCUSD-211231 0.017 0.11 0.00000 86,159 148,680
Crypto.com Exchange (Futures) BTCUSD-220624 -0.156 0.02 0.00000 70,307 136,184
BitZ (Futures) BTC_USD -0.001 0.08 0.00000 50,787 296,651
Crypto.com Exchange (Futures) BTCUSD-220930 -0.983 0.04 0.00000 44,827 376,080
Crypto.com Exchange (Futures) BTCUSD-220527 -0.093 0.10 0.00000 21,324 18,506
MCDEX (Arbitrum) BTC-USDC -2.771 0.20 -0.00005 18,218 4,556
Crypto.com Exchange (Futures) BTCUSD-220128 0.061 0.10 0.00000 17,046 60,591
Crypto.com Exchange (Futures) BTCUSD-220429 0.054 0.10 0.00000 7,160 7,059
Crypto.com Exchange (Futures) BTCUSD-220729 -0.526 0.05 0.00000 5,735 3,564
Alpha5 XBTUSD 7.706 0.57 0.00003 292 11,194
Bit.com (Futures) BTC-USDT-PERPETUAL -0.138 0.04 0.00000 237 191,725
BTCEX (Futures) BTC-USDT-PERPETUAL -0.010 0.01 0.00820 0 6,346,942,298
Biki (Futures) 28 -0.020 0.13 0.00997 0 4,057,314,709
BTCEX (Futures) BTC-25MAR22 -0.302 0.01 0.01000 0 1,631,238,351
HBTC (Futures) BTC-PERP-REV -0.004 0.01 -0.02077 0 1,586,088,571
CoinTiger (Futures) BTCUSDT 0.069 0.01 0.00788 0 931,582,778
Bitget Futures CMT_BTCSUSDT -0.003 0.01 -0.01086 0 805,185,697
BHEX (Futures) BTC-PERP-REV -0.014 0.01 -0.01084 0 661,137,486
BHEX (Futures) BTC-PERP-BUSDT -0.014 0.01 0.00422 0 544,266,307
Biki (Futures) 11 -0.022 0.10 0.00993 0 460,193,559
Bybit BTCUSDM21 -1.335 0.01 -0.04060 0 329,470,782
BitZ (Futures) BTC_DKKT 2.155 0.07 0.00000 0 297,641,032
Bybit BTCUSDU21 -6.760 0.01 -0.04060 0 205,364,120
HBTC (Futures) BTC-PERP-BUSDT 0.051 0.01 -0.00284 0 203,428,138
BitZ (Futures) 301 0.042 0.12 0.00000 0 186,963,949
Bitflyer (Futures) FX_BTC_JPY 0.000 0.02 0.00000 0 145,136,014
Biki (Futures) 1 1.440 0.02 -0.16641 0 140,945,714
Biki (Futures) 29 -0.020 0.12 0.01544 0 107,521,811
Biki (Futures) 17 -0.019 0.11 0.01790 0 99,640,498
GMO Japan (Futures) BTC_JPY 0.000 0.04 0.00000 0 96,291,984
Stormgain Futures BTC-PERPUSDT 0.000 0.06 0.00400 0 89,615,899
Binance (Futures) BTCUSDT_210326 -4.217 0.18 0.00000 0 55,708,338
Biki (Futures) 16 0.027 0.11 -0.03174 0 43,147,817
HBTC (Futures) BTC-SWAP -0.019 0.07 -0.00668 0 39,112,668
HBTC (Futures) BTC-SWAP-USDT -0.064 0.02 0.01014 0 30,321,688
Crypto.com (Futures) BTCUSD-PERP 0.000 0.05 0.00000 0 28,463,889
Delta Exchange BTCUSDT -0.176 0.01 0.05600 0 23,882,819
ZBG Futures BTC_USD-R 0.243 0.01 -0.00638 0 23,763,324
Biki (Futures) 25 -0.023 0.12 0.00998 0 15,249,112
Biki (Futures) 27 -0.020 0.12 0.00998 0 10,865,415
Biki (Futures) 26 -0.023 0.15 0.00993 0 10,138,308
Biki (Futures) 21 -0.024 0.14 0.00997 0 10,103,314
Biki (Futures) 15 -0.021 0.12 0.00997 0 9,924,614
Delta Exchange BTCUSD -0.116 0.01 0.06750 0 8,511,155
ZBG Futures BTC_USD-R20190927 0.000 0.11 0.00000 0 8,043,860
Biki (Futures) 24 -0.028 0.17 0.00166 0 6,828,717
Biki (Futures) 19 -0.121 0.11 -0.00003 0 6,584,926
Biki (Futures) 18 0.063 0.12 0.01940 0 6,486,261
Bibox (Futures) 4BTC_USDT 0.000 0.02 0.00000 0 4,216,582
Injective Exchange (Futures) BTC/USDT PERP 0.224 0.09 0.00760 0 4,008,293
EQONEX (Perpetual) 25 -2.339 0.06 1.06057 0 3,471,833
Crypto.com (Futures) BTCUSD-210625 0.000 0.06 0.00000 0 868,907
MCDEX (BSC) BTC-USX -0.548 0.00 0.00000 0 561,379
Injective Pro (Futures) BTC/USDT PERP -1.373 0.26 0.00040 0 473,029
ZBG Futures BTC_USD-R20190628 0.000 0.11 0.00000 0 311,190
Biki (Futures) 14 -0.021 0.14 0.00998 0 280,646
BHEX (Futures) BTC-SWAP-USDT 0.004 0.12 -0.02497 0 124,255
Crypto.com Exchange (Futures) BTCUSD-210924 0.183 0.13 0.00000 0 114,430
Bitfinex (Futures) BTCF0:EUTF0 0.180 1.15 0.02315 0 60,053
BHEX (Futures) BTC-SWAP 0.052 0.07 -0.01350 0 39,659
MCDEX 00002 0.000 0.00 0.00000 0 34,889
Crypto.com Exchange (Futures) BTCUSD-211126 0.065 0.09 0.00000 0 25,256
ACDX Futures BTC-PERP -1.082 0.04 0.00000 0 13,950
Crypto.com (Futures) BTCUSD-210924 0.000 0.12 0.00000 0 9,349
Crypto.com (Futures) BTCUSD-211231 0.000 0.24 0.00000 0 8,974
Crypto.com Exchange (Futures) BTCUSD-210625 0.000 0.33 0.00000 0 5,475
MCDEX BTC-USDC -0.369 0.12 0.03156 0 2,262
Liquid Perpetuals P-BTCUSD -1.188 1.19 0.00500 0 1,212
BitZ (Futures) BTC_USDT_BZ -1.676 0.04 0.00000 0 868
Biki (Futures) 2 -0.170 0.11 -0.13722 0 406
DueDEX BTCUSD 0.663 0.00 0.01000 0 134
DueDEX BTCUSDT -2.508 0.00 0.01000 0 126
Liquid Perpetuals P-BTCJPY -2.114 1.00 0.04700 0 105
Binance JEX (Futures) BTCUSDT 0.491 0.86 0.01000 0 10
Powertrade (Derivatives) BTC-USD-PERPETUAL -0.370 0.00 5,645,423.00000 0 0
MCDEX (BSC) BTC-ETH 0.310 0.02 0.00000 0 0
Stormgain Futures BTC-PERPDAI NaN 0.04 0.00400 0 0
Stormgain Futures BTC-PERPUSDC NaN 0.11 0.00400 0 0
Stormgain Futures BTC-PERPUDAI NaN 0.11 0.00400 0 0
Prime XBT BTC/USDC 0.000 0.00 0.00000 0 0
Prime XBT BTC/USDT 0.000 0.00 0.00000 0 0
CoinFLEX (Futures) BTC-USD-SWAP-LIN_LIQ 0.000 0.00 0.00000 0 0
CoinFLEX (Futures) BTC-USD-SWAP-LIN-LIQ 0.000 0.00 0.00000 0 0

Future Contracts on Indexes with Bitcoin embeded

Another way of hedging positions for the mid-term is using future contracts on indexes with the asset price as a component of the the index.

Unfortunatelly, no future contract on index consisting of BTC exists.

Perpetual Swaps on Indexes with Bitcoin component

Sometime the best option to hedge Bitcoin is to short with perpetual contract idefinitely.
Earning swaps can be in some cases crucial for the positioning.

Exchange Symbol Premium (-)
Discount (+)
Spread Funding Rate Open Intrest 24h Volume
BTSE (Futures) BBCXPFC -1.309 0.59 0.00000 0 30,866

Other crypto related Indexes (Perpetual Swaps)

There are several specyfic cryptocurrencies market Indexes which can be considered as a hedge for the trading positions. As Bitcoin take the lion's share of the whole market capitalisation, BTC dominance is one of the most notable.
Even more than on other markets, Bitcoin volatility influences almost all the trading pairs traded with both BTC and altcoins at the same moment.

Exchange Symbol Premium (-)
Discount (+)
Spread Funding Rate Open Intrest 24h Volume
Bitfinex (Futures) BTCDOMF0:USTF0 0.020 0.10 0.00000 169,935 11,106
Bitfinex (Futures) TBTCDOMF0:USTF0 0.060 0.17 -0.11774 163,844 109,181
Binance (Futures) BTCDOMUSDT -0.026 0.01 0.06240 9,752 9,387,599
BTSE (Futures) BDIPFC -0.143 0.30 0.00000 2,482 41,193

Negative correlation with Bitcoin

It can be an awkward exercise to find liquid, negatively correlated altcoins in the cryptocurrency market.

The strongest negatively correlated crypto tokens (returns in USD) in a long term are:

DASH
BTC -0.02

Check correlations with Bitcoin or use a custom form to check BTC changes in correlation coefficient with other token.

Stable coins or non-crypto assets can also be considered for hedging positions.