#Hedging is another concept that has migrated to cryptocurrencies from the stock market. It implies reducing the risk of losing funds by opening an opposite position in a linked #market
For example, if you are going to buy a bitcoin at $4,000 and then sell it at $5,000 a month later, you can open a short in the bitcoin futures market while buying it, just in case the price goes down. Hedging in cryptoindustry is very useful for miners who can calculate in advance how many coins they will get, and at what price, with a view to selling them later. And in order to hedge against a fall in #cryptocurrencytradingaddiction prices, you can open a futures contract in advance.
Not only #futures but also similar financial instruments can be hedged. The advantage of this approach is the ability to fully or partially insure oneself against financial losses in case of an unsuccessful market forecast. The disadvantage is that hedging eats up part of the profit, because it is impossible to make money on the main deal and on the insurance deal at the same time.
