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
Binance (Futures) BTCUSD_220325 -0.510 0.01 344,447,700 1,217,899,170 25/3/2022
OKEx (Futures) BTC-USDT-220325 -0.601 0.01 17,821,300 1,044,143,181 25/3/2022
OKEx (Futures) BTC-USD-220325 -0.637 0.01 536,136,300 773,856,938 25/3/2022
Huobi Futures BTC_CQ -0.515 0.02 33,668,900 385,959,664 25/3/2022
Binance (Futures) BTCUSD_220624 -2.105 0.01 69,782,500 317,525,709 24/6/2022
FTX (Derivatives) BTC-0325 -0.587 0.09 531,745,074 198,756,878 25/3/2022
Deribit BTC-25MAR22 -0.453 0.03 303,745,770 107,974,236 25/3/2022
Binance (Futures) BTCUSD_PERP -0.099 0.11 1,635,700 62,305,943 25/12/2100
Deribit BTC-28JAN22 -0.015 0.01 64,585,240 52,298,463 28/1/2022
Deribit BTC-24JUN22 -2.153 0.11 75,802,440 47,527,259 24/6/2022
FTX (Derivatives) BTC-0624 -2.520 0.12 95,307,895 43,275,703 24/6/2022
Deribit BTC-25FEB22 -0.129 0.12 16,246,990 20,825,092 25/2/2022
Huobi Futures BTC_CW 0.127 0.07 7,917,300 18,651,439 28/1/2022
Huobi Futures BTC_NW 0.009 0.13 3,303,400 17,383,733 4/2/2022
Huobi Futures BTC_NQ -3.953 0.05 37,420,100 17,181,177 25/3/2022
Deribit BTC-4FEB22 0.042 0.08 0 11,325,366 4/2/2022
Huobi Futures BTC_NW -0.007 0.02 6,329,700 9,436,056 28/1/2022
Deribit BTC-30SEP22 -4.070 0.19 56,343,840 7,803,480 30/9/2022
Huobi Futures BTC_NQ -2.073 0.27 5,586,900 4,362,506 24/6/2022
Deribit BTC-30DEC22 -6.213 0.27 14,515,050 4,286,563 30/12/2022

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 0.049 0.01 -0.00109 2,626,808,353 28,814,138,782
ZBG Futures BTC_ZUSD 0.018 0.11 0.00000 1,985,285,521 3,458,613
FTX (Derivatives) BTC-PERP -0.112 0.03 -0.01200 1,588,691,309 8,875,534,468
Gate.io (Futures) BTC_USDT -0.046 0.01 0.01000 1,231,349,915 2,571,919,359
Prime XBT BTC/USD 0.000 0.03 0.00000 1,215,162,900 648,860,313
Crypto.com Exchange (Futures) BTCUSD-PERP 0.009 0.03 -0.00001 1,215,099,913 1,215,099,913
Binance (Futures) BTCUSD_PERP 0.074 0.01 0.00776 983,634,600 11,569,103,040
C-Trade BTCUSD 0.081 0.01 0.01000 952,204,965 91,843,237
Bybit BTCUSD 0.091 0.01 0.01000 713,266,607 4,013,446,592
Bitget Futures CMT_BTCUSDT 0.008 0.02 -0.00136 650,218,862 2,589,428,358
Bybit BTCUSDT 0.021 0.01 0.01000 633,528,623 5,911,094,646
BTSE (Futures) BTCPFC 0.010 0.18 0.00000 536,635,256 632,075,238
Deribit BTC-PERPETUAL 0.038 0.01 -0.00158 506,281,210 1,017,972,093
Bitfinex (Futures) BTCF0:USTF0 -0.017 0.02 0.00000 496,800,528 248,132,430
Bitfinex (Futures) TBTCF0:USTF0 0.175 0.12 0.00000 413,715,764 72,274,942
MEXC Global (Futures) BTC_USDT -0.009 0.01 0.02140 395,754,881 151,653,821
BitMEX XBTUSD 0.073 0.01 0.01000 350,353,200 1,999,917,579
C-Trade BTCUSDT 0.076 0.03 0.01000 306,242,728 19,591,572
OKEx (Futures) BTC-USDT-SWAP 0.005 0.01 0.00615 295,443,167 8,581,052,801
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
KuCoin Futures XBTUSDTM 0.175 0.01 0.01000 270,129,310 2,483,607,746
OKEx (Futures) BTC-USD-SWAP 0.055 0.01 0.00527 223,683,300 1,699,720,881
dYdX Perpetual BTC-USD 0.183 0.01 0.00022 176,755,639 1,840,213,777
BitZ (Futures) 101 0.023 0.12 0.00000 147,712,494 2,328,854,320
Phemex (Futures) BTCUSD 0.066 0.01 -0.00211 117,676,235 4,861,962,726
MXC (Futures) BTC_USD 0.018 0.06 0.02000 111,583,200 1,212
Huobi Futures BTC-USDT 0.059 0.01 0.00930 110,902,837 1,594,945,196
Binance (Futures) BTCBUSD 0.053 0.01 0.01000 107,119,897 1,963,292,713
Huobi Futures BTC-USD 0.096 0.01 0.01000 96,580,000 1,149,590,494
Kraken (Futures) PI_XBTUSD 0.011 0.06 -0.00007 89,654,694 410,007,489
ZBG Futures BTC_USDT 0.115 0.02 -0.00423 80,506,956 2,232,672
MEXC Global (Futures) BTC_USD -0.135 0.03 0.02120 72,954,000 444
AAX Futures BTCUSDTFP 6.862 0.04 0.00156 68,113,952 331,686,008
MXC (Futures) BTC_USDT -0.023 0.03 0.00297 63,213,940 113,293,123
MyCoinStory BTCUSDT -0.016 0.02 0.01000 51,117,733 18,546,549
MCS BTCUSDT 0.020 0.05 0.01000 50,969,477 24,472,056
Gate.io (Futures) BTC_USD 0.079 0.05 0.01000 47,333,230 41,725,174
KuCoin Futures XBTUSDM -0.120 0.14 0.01000 42,471,582 92,930,178
AAX Futures BTCUSDFP 6.443 0.04 0.00581 42,360,533 209,939,100
Phemex BTCUSD -0.058 0.10 0.05913 31,597,323 341,056,663
Hopex BTCUSDT -0.022 0.00 0.00000 29,213,437 680,653,630
Bitget Futures BTCUSD 0.004 0.01 0.00469 22,994,034 89,974,754
Bitforex (Futures) SWAP-USD-BTC 0.098 0.01 -0.00900 20,876,066 735,116,680
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
CoinFLEX (Futures) BTC-USD-SWAP-LIN 0.000 0.03 0.00050 13,213,094 166,300,499
dYdX Perpetual PBTC-USDC 0.090 0.05 0.00001 7,554,375 1,121,936
Perpetual protocol BTC_USDC 0.000 0.00 -0.01061 6,053,488 8,395,954
BitZ (Futures) 1 0.055 0.11 0.00000 5,427,012 84,214,110
Bit.com BTC-PERPETUAL 0.051 0.01 0.00000 4,845,480 27,122,620
AscendEX (BitMax) (Futures) BTC-PERP -0.058 0.00 0.00554 4,615,096 17,264,472
Kumex XBTUSDM -0.052 0.11 0.01000 4,542,007 12,254,524
BitMEX BCHUSD -0.121 0.06 0.01000 3,461,299 3,436,742
MCDEX (BSC) BTC-BUSD 0.000 0.25 0.03518 3,077,322 750,513
BitMax (Futures) BTC-PERP -0.105 0.00 0.04963 2,439,673 7,922,145
BitZ (Futures) BTC_USDT -0.001 0.03 0.00000 2,082,641 11,464,759
Kumex XBTUSDTM 0.058 0.11 0.01000 1,999,642 1,926
Hopex BTCUSD 0.008 0.00 0.00000 1,916,760 3,219
Bithumb (Futures) BTC-PERP -0.099 0.13 0.04236 1,300,023 7,381,074
Kraken (Futures) PI_BCHUSD 0.382 0.19 -0.17172 1,163,403 525,977
BigONE Futures BTCUSDT -0.005 0.01 0.01000 978,247 255,168,340
BigONE Futures BTCUSD -0.015 0.01 0.01000 904,973 44,779,894
dYdX Perpetual (L1) PBTC-USDC 0.128 77.50 0.00000 843,580 410,367
BaseFEX BTCUSD 0.013 0.04 0.01000 314,593 3,087,350
Crypto.com Exchange (Futures) BTCUSD-220325 -0.557 0.01 0.00000 261,377 364,131
Crypto.com Exchange (Futures) BTCUSD-211231 0.017 0.11 0.00000 86,159 148,680
Crypto.com Exchange (Futures) BTCUSD-220624 -2.533 0.01 0.00000 52,243 69,301
BitZ (Futures) BTC_USD -0.001 0.08 0.00000 50,787 296,651
MCDEX (Arbitrum) BTC-USDC -0.667 0.20 -0.00005 36,835 2,336
Crypto.com Exchange (Futures) BTCUSD-220128 -0.010 0.12 0.00000 21,107 12,101
Crypto.com Exchange (Futures) BTCUSD-220225 -0.471 0.14 0.00000 8,111 8,114
Alpha5 XBTUSD 7.706 0.57 0.00003 292 11,194
BTCEX (Futures) BTC-USDT-PERPETUAL 0.010 0.05 0.01000 0 10,320,785,601
Biki (Futures) 28 -0.020 0.13 0.00997 0 4,057,314,709
CoinTiger (Futures) BTCUSDT 0.084 0.01 -0.00109 0 2,880,415,562
HBTC (Futures) BTC-PERP-REV -0.004 0.01 -0.02077 0 1,586,088,571
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
Bitflyer (Futures) FX_BTC_JPY 0.000 0.04 0.00000 0 466,809,046
Stormgain Futures BTC-PERPUSDT 0.000 0.10 0.00400 0 464,141,193
Biki (Futures) 11 -0.022 0.10 0.00993 0 460,193,559
GMO Japan (Futures) BTC_JPY 0.000 0.01 0.00000 0 397,273,971
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
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
BTCEX (Futures) BTC-25MAR22 -0.671 6.31 0.01000 0 63,683,305
Binance (Futures) BTCUSDT_210326 -4.217 0.18 0.00000 0 55,708,338
ZBG Futures BTC_USD-R 0.156 0.03 0.00171 0 51,076,975
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
BTCEX (Futures) BTC-24JUN22 -1.927 6.42 0.01000 0 24,695,540
Delta Exchange BTCUSDT -0.176 0.01 0.05600 0 23,882,819
Biki (Futures) 25 -0.023 0.12 0.00998 0 15,249,112
EQONEX (Perpetual) 25 -2.339 0.07 -4.52296 0 14,262,771
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
Injective Pro (Futures) BTC/USDT PERP -0.489 0.03 0.00000 0 9,969,156
Biki (Futures) 15 -0.021 0.12 0.00997 0 9,924,614
Bibox (Futures) 4BTC_USDT 0.000 0.01 0.00000 0 8,802,030
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
Injective Exchange (Futures) BTC/USDT PERP 0.224 0.09 0.00760 0 4,008,293
Bitfinex (Futures) BTCF0:EUTF0 0.016 0.01 0.05500 0 3,219,780
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
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
BHEX (Futures) BTC-SWAP 0.052 0.07 -0.01350 0 39,659
MCDEX 00002 0.000 0.00 0.00000 0 34,889
MCDEX (BSC) BTC-ETH 0.000 0.03 0.00000 0 30,454
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
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 -0.151 0.13 0.01417 1,029,496 105,482
Bitfinex (Futures) TBTCDOMF0:USTF0 0.060 0.17 -0.11774 163,844 109,181
Binance (Futures) BTCDOMUSDT 0.173 0.02 -0.03346 6,730 31,965,728
BTSE (Futures) BDIPFC 0.155 0.27 0.00000 3,399 17,862

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.