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.

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
Huobi Futures BTC_CQ -0.261 0.10 308,458,700 1,684,883,784 26/5/2020
Huobi Futures BTC_CQ -2.282 0.10 444,289,500 916,817,622 25/8/2020
OKEx (Futures) BTC-USD-200925 -2.187 0.00 522,563,800 534,328,900 25/8/2020
OKEx (Futures) BTC-USD-200807 -0.095 0.00 80,476,300 289,571,000 7/7/2020
Huobi Futures BTC_CW -0.069 0.10 43,835,800 282,691,016 31/6/2020
OKEx (Futures) BTC-USD-200731 -0.131 0.00 69,186,800 250,971,400 31/6/2020
Huobi Futures BTC_CW -0.332 0.11 137,295,400 241,553,307 26/5/2020
Huobi Futures BTC_NW -0.300 0.10 9,633,600 224,095,352 12/5/2020
Huobi Futures BTC_CW -0.116 0.10 26,371,100 190,752,911 19/5/2020
OKEx (Futures) BTC-USD-200626 -0.126 0.00 157,190,500 182,718,100 26/5/2020
Huobi Futures BTC_NW -0.022 0.13 12,213,600 166,384,521 19/5/2020
Huobi Futures BTC_CW -0.131 0.10 41,739,500 165,223,718 7/7/2020
OKEx (Futures) BTC-USD-200619 -0.102 0.00 39,836,500 155,258,700 19/5/2020
OKEx (Futures) BTC-USD-200612 -0.066 0.00 44,895,900 147,802,200 12/5/2020
OKEx (Futures) BTC-USD-200605 -0.056 0.00 55,443,800 139,561,700 5/5/2020
Huobi Futures BCH_CQ -0.120 0.12 22,037,510 138,946,163 26/5/2020
Huobi Futures BTC_CW -0.101 0.10 24,609,800 138,729,393 5/5/2020
Huobi Futures BTC_NW -0.472 0.10 47,767,500 137,008,075 7/7/2020
Huobi Futures BTC_NW -0.064 0.10 17,728,400 129,281,204 3/6/2020
Huobi Futures BTC_NW 0.105 0.10 17,986,000 127,471,700 10/6/2020
Huobi Futures BTC_CW -0.066 0.10 22,692,400 126,247,284 10/6/2020
Huobi Futures BTC_NW -0.206 0.10 205,928,500 113,318,122 26/5/2020
Huobi Futures BTC_CW -0.008 0.10 16,092,100 112,520,598 12/5/2020
Huobi Futures BTC_NW -0.126 0.10 17,562,100 106,123,045 17/6/2020
Huobi Futures BTC_CW -0.124 0.10 67,660,500 105,691,158 14/7/2020
Huobi Futures BTC_CW -0.031 0.10 27,030,700 99,214,901 3/6/2020
OKEx (Futures) BTC-USD-201225 -3.825 0.00 132,113,500 97,570,000 25/11/2020
Huobi Futures BTC_CW -0.010 0.10 30,924,200 94,230,115 24/6/2020
Huobi Futures BTC_NW -0.341 0.11 52,250,100 85,759,387 14/7/2020
Huobi Futures BCH_CQ -2.425 0.10 30,039,680 84,432,256 25/8/2020
Huobi Futures BTC_NW -0.231 0.10 25,495,700 81,662,574 31/6/2020
Binance (Futures) BTCUSD_200925 -2.111 0.10 29,013,100 77,079,446 25/8/2020
Huobi Futures BCH_CW -0.058 0.10 1,850,680 76,356,717 12/5/2020
Huobi Futures BTC_NW -0.181 0.10 14,469,700 76,061,497 24/6/2020
OKEx (Futures) BTC-USD-200710 -0.058 0.00 55,221,900 72,924,800 10/6/2020
OKEx (Futures) BTC-USD-200703 -0.009 0.00 50,152,500 72,506,200 3/6/2020
OKEx (Futures) BTC-USD-200814 -0.197 0.00 98,866,400 69,665,600 14/7/2020
Huobi Futures BTC_CW -0.067 0.10 19,580,500 63,699,144 17/6/2020
Huobi Futures BCH_CW -0.206 0.10 6,078,420 63,268,290 26/5/2020
OKEx (Futures) BTC-USD-200724 -0.008 0.00 53,797,600 59,825,100 24/6/2020
OKEx (Futures) BCH-USD-200925 -2.181 0.00 24,185,950 54,029,230 25/8/2020
Huobi Futures BCH_NW -0.140 0.18 1,350,010 48,402,275 19/5/2020
CME Bitcoin Futures BTCN0 0.000 0.00 0 44,484,325 31/6/2020
OKEx (Futures) BTC-USD-200821 -0.535 0.00 27,705,300 44,038,000 21/7/2020
Huobi Futures BCH_CW -0.273 0.10 2,047,490 43,340,024 19/5/2020
Huobi Futures BCH_NW -0.401 0.13 14,451,880 38,364,816 26/5/2020
OKEx (Futures) BTC-USD-200717 -0.108 0.00 40,505,700 33,851,900 17/6/2020
Bakkt 6137645 0.000 0.00 0 32,347,880
Huobi Futures BTC_NW -0.448 0.10 21,677,600 32,259,428 21/7/2020
Bakkt 6137618 0.000 0.00 0 31,826,963
OKEx (Futures) BCH-USD-200807 -0.208 0.00 2,313,420 30,218,660 7/7/2020
Deribit BTC-26JUN20 -0.085 0.11 22,137,950 28,799,232 26/5/2020
BitMEX XBTM20 -0.160 0.11 39,141,723 28,187,963 26/5/2020
CME Bitcoin Futures BTCQ0 0.000 0.00 0 28,177,175 28/7/2020
FTX (Derivatives) BTC-0626 -0.274 0.15 7,999,804 27,479,676 26/5/2020
Huobi Futures BCH_NW -0.260 0.10 1,309,110 25,522,634 3/6/2020
BitMEX XBTZ20 -3.184 0.10 114,112,783 24,553,808 25/11/2020
Huobi Futures BCH_CW -0.202 0.10 3,446,320 23,744,439 31/6/2020
BitMEX XBTU20 -1.678 0.10 168,270,310 23,080,019 25/8/2020
Huobi Futures BCH_CW -0.352 0.12 2,996,580 22,989,916 7/7/2020
Binance (Futures) BTCUSD_201225 -4.228 0.10 8,590,500 22,303,619 25/11/2020
Huobi Futures BCH_NW -0.248 0.18 1,363,650 21,925,278 12/5/2020
Huobi Futures BTC_NQ -3.722 0.14 36,605,200 18,608,151 25/11/2020
Huobi Futures BCH_CW -0.064 0.10 2,266,940 18,009,430 10/6/2020
Huobi Futures BCH_CW -0.181 0.10 2,402,370 17,802,766 5/5/2020
OKEx (Futures) BCH-USD-200731 -0.297 0.00 1,990,760 14,523,370 31/6/2020
Huobi Futures BCH_CW 0.075 0.10 1,833,550 13,000,943 3/6/2020
OKEx (Futures) BCH-USD-201225 -3.778 0.00 8,728,440 11,414,450 25/11/2020
Deribit BTC-25SEP20 -1.729 0.13 81,607,430 11,229,631 25/8/2020
Huobi Futures BCH_CW -0.100 0.11 2,089,900 10,977,052 17/6/2020
Huobi Futures BCH_CW -0.109 0.14 1,579,810 10,415,583 24/6/2020
Huobi Futures BTC_NQ -1.914 0.14 60,991,600 8,606,385 19/5/2020
OKEx (Futures) BCH-USD-200814 -0.423 0.00 2,929,500 8,586,790 14/7/2020
OKEx (Futures) BCH-USD-200612 -0.078 0.00 1,054,680 8,278,620 12/5/2020
Huobi Futures BCH_NW -0.678 0.14 2,519,610 7,921,648 14/7/2020
OKEx (Futures) BCH-USD-200626 0.030 0.00 4,235,560 7,232,830 26/5/2020
CME Bitcoin Futures BTCV0 0.000 0.00 0 6,796,500 30/9/2020
OKEx (Futures) BCH-USD-200710 -0.099 0.00 1,311,660 6,402,410 10/6/2020
FTX (Derivatives) BTC-0925 -2.098 0.16 32,847,968 6,044,919 25/8/2020
OKEx (Futures) BCH-USD-200724 -0.125 0.00 1,043,480 5,852,080 24/6/2020
OKEx (Futures) BCH-USD-200619 -0.139 0.00 961,810 5,639,400 19/5/2020
Huobi Futures BCH_NW -0.010 0.16 1,362,440 5,238,819 10/6/2020
Kraken (Futures) FI_XBTUSD_200731 -0.005 0.18 0 5,048,982 31/6/2020
OKEx (Futures) BCH-USD-200605 -0.168 0.00 1,180,860 4,912,440 5/5/2020
OKEx (Futures) BCH-USD-200703 -0.011 0.00 1,058,780 4,749,380 3/6/2020
Huobi Futures BCH_NQ -4.168 0.12 9,993,980 4,714,589 25/11/2020
Bakkt 6137595 0.000 0.00 0 4,712,960
CME Bitcoin Futures BTCU0 0.000 0.00 0 4,341,675 25/8/2020
Huobi Futures BCH_NW -0.720 0.17 2,714,620 3,588,059 7/7/2020
Delta Exchange BTCUSD_26JUN 0.018 0.11 0 3,351,795
FTX (Derivatives) BTC-1225 -3.791 0.19 10,298,338 3,066,258 25/11/2020
OKEx (Futures) BCH-USD-200821 -0.824 0.00 712,970 2,858,710 21/7/2020
Huobi Futures BCH_NW -0.283 0.12 1,420,800 2,806,878 17/6/2020
Huobi Futures BCH_NW -0.189 0.13 1,758,660 2,769,038 31/6/2020
Deribit BTC-25DEC20 -3.589 0.13 26,698,310 2,766,841 25/11/2020
Huobi Futures BCH_NQ -1.343 0.18 6,099,160 2,548,557 19/5/2020
OKEx (Futures) BCH-USD-200717 -0.175 0.00 1,038,360 2,273,580 17/6/2020
Delta Exchange BTCUSD_25SEP -1.641 0.16 0 2,185,155
Kraken (Futures) FI_XBTUSD_200626 -0.052 0.11 0 2,134,480 26/5/2020
Huobi Futures BCH_NW -0.217 0.15 1,470,360 2,079,192 24/6/2020
CME Bitcoin Futures BTCM0 0.000 0.00 0 1,894,200 26/5/2020
BitMEX BCHU20 -0.696 0.14 6,561,868 1,793,509 25/8/2020
Bakkt 6137574 0.000 0.00 0 1,701,245
Deribit BTC-26MAR21 -5.208 0.10 24,199,590 1,643,458 26/2/2021
Delta Exchange BTCUSD_25DEC -3.225 0.10 0 1,352,583
BTSE (Futures) BTCM20 -0.086 0.12 8,807,463 1,178,057 26/5/2020
BTSE (Futures) BTCN20 -0.952 0.10 9,769,083 963,318 31/6/2020
CME Bitcoin Futures BTCX0 0.000 0.00 0 952,800 27/10/2020
CME Bitcoin Futures BTCZ0 0.000 0.00 0 772,850 24/11/2020
BitMEX BCHM20 0.000 0.14 2,771,404 678,332 26/5/2020
Kraken (Futures) FI_XBTUSD_200925 0.141 0.10 0 675,357 25/8/2020
Bakkt 6180587 0.000 0.00 0 509,013
Kraken (Futures) FI_XBTUSD_200828 0.159 0.10 0 464,488 28/7/2020
CME Bitcoin Futures BTCF1 0.000 0.00 0 361,500 29/0/2021
KuCoin Futures XBTMM20 -0.136 0.12 74,589 324,088 26/5/2020
Kumex XBTMM20 -0.330 0.11 36,405 284,720 26/5/2020
Kumex XBTMU20 -1.419 0.11 17,290 249,698 25/8/2020
Kraken (Futures) FI_XBTUSD_201225 -0.008 0.12 0 187,166 25/11/2020
Bitflyer (Futures) BTCJPY31JUL2020 0.000 0.43 0 146,818
Bitflyer (Futures) BTCJPY12JUN2020 0.000 0.58 0 137,030
KuCoin Futures XBTMU20 -2.112 0.13 331,320 124,669 25/8/2020
Bakkt 6236159 0.000 0.00 0 113,600
Bitflyer (Futures) BTCJPY05JUN2020 0.000 0.31 0 92,196
KuCoin Futures XBTMZ20 -3.851 0.13 47,494 82,963 25/11/2020
BTSE (Futures) BTCU20 0.068 0.13 11,261,889 64,872 25/8/2020
Bitflyer (Futures) BTCJPY03JUL2020 0.000 0.51 0 24,609
Kraken (Futures) FI_BCHUSD_200626 -0.043 0.14 0 21,878 26/5/2020
BTSE (Futures) BTCQ20 0.129 0.18 9,579,415 21,363 28/7/2020
BTSE (Futures) BTCZ20 0.933 0.16 9,876,077 16,613 25/11/2020
Bitflyer (Futures) BTCJPY25SEP2020 0.000 0.56 0 15,080
Bitflyer (Futures) BTCJPY26JUN2020 0.000 0.95 0 14,765
Bakkt 6205042 0.000 0.00 0 12,273
Bitflyer (Futures) BTCJPY19JUN2020 0.000 0.30 0 11,891
Bakkt 6381111 0.000 0.00 0 9,845
Kraken (Futures) FI_BCHUSD_200731 -2.238 1.02 0 9,576 31/6/2020
Bitflyer (Futures) BTCJPY24JUL2020 0.000 0.60 0 7,942
CoinFLEX (Futures) BTC-USD-200925-LIN 0.000 0.00 0 6,633
Bitflyer (Futures) BTCJPY14AUG2020 0.000 0.42 0 5,919
Kraken (Futures) FI_BCHUSD_200925 0.589 0.23 0 4,500 25/8/2020
Bitflyer (Futures) BTCJPY17JUL2020 0.000 0.37 0 4,423
Kraken (Futures) FI_BCHUSD_200828 -0.590 0.13 0 1,921 28/7/2020
Bitflyer (Futures) BTCJPY07AUG2020 0.000 0.58 0 1,893
Bitflyer (Futures) BTCJPY10JUL2020 0.000 0.86 0 1,780
Bitflyer (Futures) BTCJPY21AUG2020 0.000 0.76 0 600

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
BitMEX XBTUSD -0.039 0.10 0.01000 710,525,420 1,011,940,882
Binance (Futures) BTCUSDT -0.007 0.10 0.01000 404,891,268 1,466,120,872
Bybit BTCUSD -0.024 0.10 0.01000 320,600,776 681,585,349
Huobi Futures BTC-USD 0.000 0.10 0.01000 236,309,600 812,572,476
OKEx (Futures) BTC-USD-SWAP 0.038 0.00 0.02224 151,069,500 281,451,800
FTX (Derivatives) BTC-PERP -0.024 0.10 0.00160 150,457,771 130,910,975
Deribit BTC-PERPETUAL -0.018 0.10 0.00647 118,193,810 83,125,656
Bitfinex (Futures) TBTCF0:USTF0 0.133 0.12 0.00000 85,026,616 716,305
Bitforex (Futures) SWAP-USD-BTC 0.001 0.10 -0.00700 77,934,545 184,745,112
BitZ (Futures) 101 0.009 0.10 0.00000 68,957,399 249,354,974
Bybit BTCUSDT -0.025 0.10 0.01000 60,204,630 82,632,671
BTCMEX BTCUSD -0.033 0.00 0.01000 42,901,122 386,780,227
Kraken (Futures) PI_XBTUSD 0.015 0.10 0.00052 41,336,050 18,103,935
BTSE (Futures) BTCPFC -0.012 0.10 0.00000 37,493,725 59,940,569
Phemex (Futures) BTCUSD 0.020 0.10 0.01000 31,880,503 250,076,763
Phemex BTCUSD -0.058 0.10 0.05913 31,597,323 341,056,663
KuCoin Futures XBTUSDM -0.002 0.11 0.00000 27,079,144 41,378,312
KuCoin Futures XBTUSDTM 0.001 0.11 0.00000 23,814,790 46,909,244
BaseFEX BTCUSDT -0.013 0.10 0.00000 22,026,738 21,651,340
BitZ (Futures) 201 0.035 0.10 0.00000 18,781,471 67,992,863
Huobi Futures BCH-USD -0.217 0.10 0.01000 16,455,390 75,321,439
OKEx (Futures) BCH-USD-SWAP -0.028 0.00 0.03447 16,448,130 29,282,840
Hopex BTCUSDT 0.024 0.00 0.00000 14,910,984 490,976,288
MXC (Futures) BTC_USDT -0.037 0.10 0.02090 12,470,834 26,885,176
Gate.io (Futures) BTC_USD 0.024 0.00 0.01000 8,368,226 21,517,271
BitZ (Futures) 1 -0.039 0.10 0.00000 7,812,938 28,306,865
Hopex BTCUSD -0.021 0.00 0.00000 6,782,162 8,715
Kumex XBTUSDM -0.052 0.11 0.01000 4,542,007 12,254,524
BaseFEX BTCUSD 0.009 0.12 0.01000 4,346,321 42,235,361
Kraken (Futures) PI_BCHUSD -0.033 0.13 0.03241 2,849,706 996,604
BitMax (Futures) BTC-PERP -0.059 0.00 0.02349 2,678,392 3,125,778
Bithumb (Futures) BTC-PERP -0.062 0.10 0.02351 2,676,906 3,144,428
Kumex XBTUSDTM 0.058 0.11 0.01000 1,999,642 1,926
dYdX Perpetual PBTC-USDC -0.104 0.12 0.00000 1,209,621 771,819
DueDEX BTCUSD -0.049 0.00 0.03570 1,028,949 13,749,064
DueDEX BTCUSDT -0.032 0.00 0.01000 450,937 1,634,608
Biki (Futures) 28 -0.047 0.12 0.00994 0 3,477,115,102
Bitflyer (Futures) FX_BTC_JPY 0.000 0.11 0.00000 0 1,013,749,625
Biki (Futures) 11 -0.047 0.10 0.00988 0 435,169,917
Prime XBT BTC/USD 0.000 0.11 0.00000 0 315,961,337
Biki (Futures) 29 -0.049 0.12 0.01006 0 103,356,192
Biki (Futures) 17 -0.019 0.11 0.01790 0 99,640,498
GMO Japan (Futures) BTC_JPY 0.000 0.10 0.00000 0 93,554,532
Biki (Futures) 1 -0.046 0.11 -0.00576 0 83,523,577
HBTC (Futures) BTC-PERP-BUSDT 0.018 0.10 0.00183 0 81,581,055
Biki (Futures) 16 -0.047 0.13 -0.04116 0 80,529,655
BitZ (Futures) 301 -0.002 0.11 0.00000 0 74,565,466
HBTC (Futures) BTC-SWAP-USDT 0.017 0.11 0.00254 0 69,049,134
HBTC (Futures) BTC-SWAP 0.013 0.11 0.00014 0 45,454,039
ZBG Futures BTC_USD-R 0.000 0.10 0.00000 0 27,097,751
Delta Exchange BTCUSDT -0.107 0.10 0.01000 0 22,331,110
Bibox (Futures) 4BTC_USDT 0.000 0.14 0.00000 0 22,294,876
Delta Exchange BTCUSD -0.065 0.10 0.01000 0 16,235,717
BHEX (Futures) BTC-SWAP 0.010 0.11 0.00070 0 12,176,232
Biki (Futures) 21 -0.049 0.13 0.00995 0 11,137,627
Biki (Futures) 25 -0.049 0.12 0.00995 0 11,053,883
Biki (Futures) 27 -0.046 0.12 0.00995 0 10,398,666
HBTC (Futures) BTC-PERP-REV 0.014 0.11 0.00089 0 9,980,741
Biki (Futures) 15 -0.046 0.14 0.00995 0 9,609,548
Biki (Futures) 26 -0.049 0.15 0.00997 0 9,365,925
ZBG Futures BTC_USD-R20190927 0.000 0.11 0.00000 0 8,043,860
BitMEX BCHUSD -0.077 0.12 0.02850 0 6,957,371
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
Biki (Futures) 24 -0.028 0.13 -0.00776 0 5,925,964
ZBG Futures BTC_ZUSD 0.000 0.10 0.00000 0 2,682,333
ZBG Futures BTC_USDT 0.000 0.10 0.00000 0 2,023,830
CoinFLEX (Futures) BTC-USD-SWAP-LIN 0.000 0.00 0.00000 0 469,909
ZBG Futures BTC_USD-R20190628 0.000 0.11 0.00000 0 311,190
Biki (Futures) 14 -0.046 0.14 0.00995 0 197,961
Liquid Perpetuals P-BTCUSD -0.205 0.12 0.25900 0 23,165
Biki (Futures) 2 -0.049 0.12 0.01000 0 6,434
Binance JEX (Futures) BTCUSDT 0.058 0.85 0.01000 0 1,323
Liquid Perpetuals P-BTCJPY 1.378 0.13 0.36400 0 1,059
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

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:

KNC DASH
BTC -0.02 -0.02

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

There is a group of other derivatives which can be utilized for the purpose of hedging, like crypto indexes.

Indexes can be partly correlated with Bitcoin

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