Sometimes I'm asked: why is hedging in crypto even necessary?
If I explain it very simply — it's a way to protect your money from sharp market movements.
For example, I have Bitcoin, and I believe in it long-term. I don't want to sell it. But the market starts to look nervous: news, volatility, possible correction.
In such a situation, you can open a short position on futures. If the price drops — I lose on the spot, but gain on the short. If the market rises — the short may incur a small loss, but the main asset still appreciates.
So hedging is not about “guessing the market,” but rather about reducing risk.
Personally, for me, it’s like insurance:
you hope you won’t need it…
but it’s more comforting when it’s there 🙂