How can natural gas futures be used to hedge cryptocurrency investments?

3 answers

• Cedric DecalayJul 25, 2024 · a year ago
  One strategy for using natural gas futures to hedge cryptocurrency investments is to take advantage of the negative correlation between the two assets. When the price of natural gas futures rises, the price of cryptocurrencies tends to fall, and vice versa. By taking a long position in natural gas futures, you can offset potential losses in your cryptocurrency investments. This can help protect your portfolio from market volatility and reduce the overall risk.
  464

  232
• MicoAug 19, 2020 · 5 years ago
  Another strategy is to use natural gas futures as a diversification tool. By adding natural gas futures to your investment portfolio, you can reduce the overall risk and increase the potential for returns. This is because natural gas futures have a different risk profile compared to cryptocurrencies, and their prices are influenced by different factors. By diversifying your investments, you can mitigate the impact of any negative events that may affect either the cryptocurrency or natural gas markets.
  506

  169
• Andrés Eduardo Buzeta GonzálezJul 13, 2021 · 4 years ago
  BYDFi, a leading digital asset exchange, offers natural gas futures contracts that can be used for hedging cryptocurrency investments. These futures contracts allow investors to take positions on the future price of natural gas, providing a way to hedge against potential losses in the cryptocurrency market. By using BYDFi's natural gas futures, investors can effectively manage their risk and protect their cryptocurrency investments.
  436

  109