Hedging

Hedging is a crypto trading strategy used to mitigate risk by taking an offsetting position. It is referred to as buying insurance for your cryptocurrency portfolio. It also helps traders diversify their portfolios by investing in multiple financial instruments. In the cryptocurrency market, hedging can be achieved through various methods, including futures contracts, options trading, and short selling.

However, there are some downsides to hedging, such as it being expensive and limiting upside potential. The use of Stablecoins is also a method of hedging, mitigating risks during turbulent market conditions. In simple terms, it allows traders to prioritize other trading opportunities instead of worrying about losses.