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
OKEx (Futures) BTC-USD-210924 -0.970 0.03 675,749,700 1,678,431,114 24/9/2021
Huobi Futures BTC_CQ -0.962 0.01 279,508,500 1,559,444,815 24/9/2021
Binance (Futures) BTCUSD_210924 -0.831 0.01 325,024,200 1,116,388,827 24/9/2021
OKEx (Futures) BTC-USDT-210924 -0.972 0.01 33,150,300 869,447,567 24/9/2021
OKEx (Futures) BTC-USD-210730 0.019 0.04 71,787,700 672,375,534 30/7/2021
OKEx (Futures) BTC-USD-211231 -3.086 0.01 165,828,900 591,578,811 31/12/2021
OKEx (Futures) BTC-USDT-210730 -0.054 0.02 6,407,200 497,002,273 30/7/2021
OKEx (Futures) BTC-USDT-211231 -2.959 0.05 12,974,700 482,153,041 31/12/2021
Huobi Futures BTC_NQ -2.613 0.01 209,549,000 426,570,315 24/9/2021
OKEx (Futures) BTC-USD-210806 -0.045 0.02 19,508,100 322,559,169 6/8/2021
OKEx (Futures) BTC-USDT-210806 -0.193 0.04 6,276,700 254,464,527 6/8/2021
FTX (Derivatives) BTC-0924 -1.557 0.03 504,597,741 189,452,260 24/9/2021
Binance (Futures) BTCUSD_211231 -3.207 0.01 54,658,000 185,767,569 31/12/2021
Huobi Futures BTC_CW -0.063 0.03 30,263,500 147,922,623 30/7/2021
Huobi Futures BTC_NW 0.011 0.03 31,240,000 88,525,963 6/8/2021
FTX (Derivatives) BTC-1231 -3.891 0.03 171,173,664 68,482,346 31/12/2021
Deribit BTC-24SEP21 -1.467 0.07 275,536,090 64,206,142 24/9/2021
Binance (Futures) BTCUSD_PERP -0.099 0.11 1,635,700 62,305,943 25/12/2100
Bybit BTCUSDU21 -0.884 0.01 84,487,607 43,786,820 24/9/2021
Huobi Futures BTC_NW 0.082 0.01 15,177,900 42,234,987 30/7/2021
Bybit BTCUSDZ21 -3.358 0.01 44,468,222 32,788,660 31/12/2021
Deribit BTC-30JUL21 0.009 0.08 47,262,920 28,931,308 30/7/2021
Deribit BTC-31DEC21 -3.632 0.09 251,146,830 26,480,266 31/12/2021
Deribit BTC-6AUG21 -0.265 0.09 0 11,040,415 6/8/2021
Deribit BTC-27AUG21 -0.574 0.10 9,419,460 7,372,469 27/8/2021
Deribit BTC-25MAR22 -5.824 0.05 114,601,340 5,597,037 25/3/2022
Deribit BTC-24JUN22 -7.376 0.17 18,290,430 2,722,933 24/6/2022
CME Bitcoin Futures BTCZ1 0.000 0.00 0 250,000 31/12/2021

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 0.030 0.01 0.00127 2,199,910,955 29,712,326,188
ZBG Futures BTC_ZUSD 0.018 0.11 0.00000 1,985,285,521 3,458,613
FTX (Derivatives) BTC-PERP -0.008 0.01 0.00240 1,489,276,187 4,628,413,204
Bybit BTCUSD 0.024 0.02 0.01000 926,261,225 6,523,684,040
BitMEX XBTUSD 0.067 0.01 0.01000 669,486,100 2,033,525,484
BTSE (Futures) BTCPFC 0.021 0.08 0.00000 575,514,125 1,069,321,849
Binance (Futures) BTCUSD_PERP 0.011 0.01 0.01000 540,929,400 9,507,016,554
Bybit BTCUSDT 0.050 0.01 0.01000 526,870,670 4,379,861,988
Bitfinex (Futures) BTCF0:USTF0 0.030 0.01 0.00000 511,864,013 141,638,670
Deribit BTC-PERPETUAL -0.038 0.01 0.00206 461,802,640 850,240,738
Bitfinex (Futures) TBTCF0:USTF0 0.175 0.12 0.00000 413,715,764 72,274,942
Bitget Futures CMT_BTCUSDT -0.008 0.01 0.03811 305,914,330 3,745,207,518
Huobi Futures BTC-USDT 0.078 0.01 0.00451 294,518,581 4,974,966,081
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
Huobi Futures BTC-USD 0.006 0.01 0.01000 240,923,300 1,873,621,552
OKEx (Futures) BTC-USDT-SWAP 0.030 0.01 -0.00182 209,803,003 2,870,595,864
KuCoin Futures XBTUSDTM 0.052 0.01 0.01000 200,152,186 1,040,422,647
OKEx (Futures) BTC-USD-SWAP -0.108 0.01 0.01886 198,809,400 1,370,975,360
MEXC Global (Futures) BTC_USDT -0.026 0.01 0.02630 175,538,484 84,665,063
C-Trade BTCUSD 0.059 0.01 0.01000 172,779,008 140,975,549
MEXC Global (Futures) BTC_USD -0.032 0.01 -0.00060 148,466,200 992
BitZ (Futures) 101 0.023 0.12 0.00000 147,712,494 2,328,854,320
Prime XBT BTC/USD 0.000 0.03 0.00000 146,169,758 1,108,886,996
MXC (Futures) BTC_USD 0.018 0.06 0.02000 111,583,200 1,212
Bitforex (Futures) SWAP-USD-BTC 0.005 0.01 0.00400 105,648,281 18,014,974
ZBG Futures BTC_USDT -0.009 0.02 0.01000 103,518,529 6,944,396
Phemex (Futures) BTCUSD -0.026 0.01 0.01000 85,066,399 1,308,658,875
Kraken (Futures) PI_XBTUSD 0.038 0.02 -0.00058 68,578,178 354,818,184
BitZ (Futures) BTC_USDT_BZ 0.061 0.03 0.00000 64,123,279 831,088,788
MXC (Futures) BTC_USDT -0.023 0.03 0.00297 63,213,940 113,293,123
Hopex BTCUSDT -0.001 0.00 0.00000 53,691,478 564,835,018
MyCoinStory BTCUSDT -0.162 0.02 0.01000 51,276,985 201,365,809
BitZ (Futures) BTC_USDT 0.006 0.08 0.00000 48,555,992 635,461,349
KuCoin Futures XBTUSDM -0.039 0.02 0.01000 37,412,489 55,092,522
Gate.io (Futures) BTC_USDT 0.060 0.00 0.01000 31,761,042 846,993,785
Phemex BTCUSD -0.058 0.10 0.05913 31,597,323 341,056,663
Binance (Futures) BTCBUSD 0.034 0.01 -0.02557 22,231,834 1,006,990,058
BaseFEX BTCUSDT -0.054 0.05 0.01046 19,358,967 18,633,808
BitZ (Futures) 201 -0.009 0.13 0.00000 17,312,302 268,684,298
Bitget Futures BTCUSD 0.015 0.01 0.01000 15,177,362 185,533,131
AAX Futures BTCUSDTFP -0.843 0.02 0.00469 8,540,493 41,436,364
dYdX Perpetual PBTC-USDC 0.090 0.05 0.00001 7,554,375 1,121,936
CoinFLEX (Futures) BTC-USD-SWAP-LIN 0.000 0.01 0.00040 7,506,489 4,633,762
Perpetual protocol BTC_USDC 0.000 0.00 -0.01328 6,317,850 9,116,060
Bit.com BTC-PERPETUAL 0.014 0.02 0.00000 5,557,535 21,809,050
BitZ (Futures) 1 0.055 0.11 0.00000 5,427,012 84,214,110
BitMEX BCHUSD -0.120 0.02 0.01000 5,354,487 11,564,772
Gate.io (Futures) BTC_USD 0.046 0.00 0.00340 4,897,610 43,299,476
Kumex XBTUSDM -0.052 0.11 0.01000 4,542,007 12,254,524
Hopex BTCUSD -0.007 0.00 0.00000 4,327,290 5,129
dYdX Perpetual BTC-USD 0.728 0.01 0.00146 4,052,383 13,856,538
AscendEX (BitMax) (Futures) BTC-PERP -0.107 0.00 0.01592 3,345,473 5,809,925
BitZ (Futures) BTC_USD -0.010 0.07 0.00000 2,742,689 36,183,948
Kraken (Futures) PI_BCHUSD -0.039 0.14 0.04151 2,492,403 1,506,868
BitMax (Futures) BTC-PERP -0.105 0.00 0.04963 2,439,673 7,922,145
ACDX Futures BTC-PERP 0.009 0.04 0.00000 2,257,155 38,083,813
Kumex XBTUSDTM 0.058 0.11 0.01000 1,999,642 1,926
AAX Futures BTCUSDFP -0.430 0.14 0.01829 1,356,792 4,842,440
Bithumb (Futures) BTC-PERP -0.099 0.13 0.04236 1,300,023 7,381,074
BigONE Futures BTCUSD -0.045 0.02 0.01000 905,829 48,452,574
BaseFEX BTCUSD -0.034 0.05 0.01000 888,364 3,854,300
dYdX Perpetual (L1) PBTC-USDC 0.128 77.50 0.00000 843,580 410,367
BigONE Futures BTCUSDT 0.005 0.02 0.01000 731,561 293,670,998
Alpha5 XBTUSD 0.581 0.13 0.00011 491 30,423
Biki (Futures) 28 -0.020 0.13 0.00997 0 4,057,314,709
CoinTiger (Futures) BTCUSDT 0.038 0.01 0.00127 0 2,971,224,033
HBTC (Futures) BTC-PERP-REV -0.004 0.01 -0.02077 0 1,586,088,571
Bitget Futures CMT_BTCSUSDT 0.006 0.02 -0.02000 0 1,103,389,583
Stormgain Futures BTC-PERPUSDT 0.000 0.04 0.00400 0 801,373,013
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
Bitflyer (Futures) FX_BTC_JPY 0.000 0.02 0.00000 0 512,720,559
Biki (Futures) 11 -0.022 0.10 0.00993 0 460,193,559
GMO Japan (Futures) BTC_JPY 0.000 0.03 0.00000 0 380,290,179
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
Biki (Futures) 1 1.440 0.02 -0.16641 0 140,945,714
ZBG Futures BTC_USD-R 0.055 0.01 0.01000 0 116,517,027
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
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
BHEX (Futures) BTC-SWAP -0.006 0.03 -0.00646 0 37,700,333
HBTC (Futures) BTC-SWAP-USDT -0.064 0.02 0.01014 0 30,321,688
Crypto.com Exchange (Futures) BTCUSD-PERP -0.014 0.05 -0.00003 0 29,178,338
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
BHEX (Futures) BTC-SWAP-USDT 0.047 0.04 -0.00379 0 21,995,876
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
Bibox (Futures) 4BTC_USDT 0.000 2.67 0.00000 0 10,444,081
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
Crypto.com (Futures) BTCUSD-210625 0.000 0.06 0.00000 0 868,907
Crypto.com Exchange (Futures) BTCUSD-210924 0.000 0.10 0.00000 0 557,116
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
Crypto.com Exchange (Futures) BTCUSD-211231 0.000 0.39 0.00000 0 28,105
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
Binance JEX (Futures) BTCUSDT 0.928 1.00 0.01000 0 1,257
Liquid Perpetuals P-BTCUSD -1.188 1.19 0.00500 0 1,212
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
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 0.015 0.75 0.00000 0 76,698

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 0.017 0.01 0.00000 952,396 230,470
Bitfinex (Futures) TBTCDOMF0:USTF0 0.060 0.17 -0.11774 163,844 109,181
BTSE (Futures) BDIPFC 0.105 0.29 0.00000 4,436 46,594
Binance (Futures) BTCDOMUSDT 0.159 0.02 -0.08084 2,074 5,722,329

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.