# Hedging Related Articles

HTX News Center provides the latest articles and in-depth analysis on "Hedging", covering market trends, project updates, tech developments, and regulatory policies in the crypto industry.

Mapping Volatility Through Time: Implied Volatility Heatmaps

Glassnode introduces two new implied volatility (IV) heatmap metrics—IV Moneyness Heatmap and IV Delta Heatmap—that visualize how options markets price risk across strikes and maturities over time, rather than at a single point. These tools help identify volatility regimes, such as periods of calm, stress, and transitions between them. The heatmaps display IV using color gradients, with red indicating high volatility and blue indicating low volatility. Key patterns include elevated put-side IV during drawdowns (signaling hedging demand), tail-risk repricing in deep out-of-the-money options, and regime shifts that inform trading strategies like hedging in low-vol environments or selling premium in high-vol periods. Available in Glassnode Studio, these metrics provide a dynamic view of market expectations and risk sentiment.

insights.glassnode4h ago

Mapping Volatility Through Time: Implied Volatility Heatmaps

insights.glassnode4h ago

How to View the Divergence Between Gold and Oil Prices?

The article analyzes the divergence between gold and oil prices following the outbreak of the U.S.-Iran war. While oil prices surged significantly, gold experienced a decline, contrary to expectations given its traditional role as a safe-haven asset during geopolitical crises. Gold serves three primary hedging functions: against geopolitical risk, inflation risk, and U.S. dollar risk. Since late 2023, gold had been in a strong bull market, rising from $1,800 to over $5,000, driven by simultaneous geopolitical tensions (e.g., Russia-Ukraine war, Middle East conflicts), inflationary pressures, and a weakening dollar due to the Fed's premature rate cuts. However, after the U.S. "decapitation" strike on Iran, gold prices fell sharply. This was attributed to two main factors: a shift of capital from gold to oil, as investors repositioned portfolios to capitalize on rising oil prices, and a liquidity crisis in U.S. financial markets that forced large-scale sell-offs of gold—a highly liquid asset—to meet redemption demands. More critically, growing pessimism about a prolonged U.S.-Iran conflict raised fears of sustained high oil prices, potential global economic disruption, and a possible reversal of Fed monetary policy (delayed cuts or even renewed hikes). This expectation of tighter policy caused gold’s dollar-related hedging function to reverse, overwhelming its geopolitical and inflation hedging roles and leading to a severe correction. Oil prices also experienced volatility. They initially spiked to nearly $120 per barrel post-strike, then fell by 30% on Trump’s hints of a quick resolution, but rebounded as market expectations corrected when the conflict persisted and the Strait of Hormuz remained threatened. The outlook for both commodities depends on the evolution of the U.S.-Iran conflict. If it becomes a prolonged war like Ukraine, gold may lack short-term value as monetary fears prevail, while oil and energy assets may benefit. A critical factor will be whether the Strait of Hormuz is reopened, which hinges on geopolitical decisions ahead.

marsbit10h ago

How to View the Divergence Between Gold and Oil Prices?

marsbit10h ago

2008-style crisis ahead? – How crypto investors are reacting to ‘zero rate cuts’

With expectations of zero rate cuts and persistent inflation risks, crypto market dynamics are shifting toward capital preservation. While the total crypto market cap remains stable near $2.4 trillion, defensive positioning is evident as stablecoin supply hits a new all-time high of $316 billion. USDT outflows and declining exchange reserves indicate investors are moving liquidity into on-chain stablecoins, preparing to redeploy when risk appetite improves. Analysts warn that sustained high yields and borrowing costs could heighten systemic risks, echoing pre-crisis conditions. This cautious stance suggests stablecoins are becoming a key hedging tool amid deteriorating macro conditions.

ambcrypto2 days ago 11:07

2008-style crisis ahead? – How crypto investors are reacting to ‘zero rate cuts’

ambcrypto2 days ago 11:07

BTC Market Pulse: Week 12

Spot market signals are mixed but constructive, with a return of aggressive buying pressure though overall volume remains subdued. Derivatives show rising but cautious engagement, with increased open interest and negative funding rates. ETF inflows accelerated, indicating renewed institutional demand. On-chain activity is muted with lower active addresses and stable fees. Capital flow and profitability metrics are gradually improving, pointing to reduced market stress. Overall, conditions show signs of stabilization and recovery, though broader conviction has yet to fully return.

insights.glassnode03/16 17:57

insights.glassnode03/16 17:57

If You Bought One Deep OTM Bitcoin Put Option Every Month Since 2018, Could You Make Money in the Long Run?

Based on a systematic backtest from 2018 to 2026, this study examines the long-term profitability of a monthly strategy of buying one deep out-of-the-money (OTM) put option on Bitcoin (BTC) and Ethereum (ETH), with a target delta of 0.01 and a 30-day expiration. The results are highly divergent. The strategy is not a stable source of profit but a classic, path-dependent tail insurance tool characterized by extreme right skew, very low win rates, and severe drawdowns. For BTC, the strategy yielded a final total return of 97.62% (CAGR: 8.66%), while for ETH, it resulted in a -73.07% loss (CAGR: -14.78%). The performance difference is attributed to BTC's extreme payouts being sufficient to cover the long-term cost of premiums, whereas ETH's were not. Key characteristics of the strategy include: * Extremely low win rates (BTC: 2.04%, ETH: 1.02%). * Catastrophic maximum drawdowns (BTC: -97.24%, ETH: -93.82%). * The median trade return was -100% for both assets. * Profits are driven entirely by a few extreme winning trades, with the top 5 trades contributing over 10x the net profit for BTC. * Notably, not all major market crashes (e.g., March 2020, LUNA, FTX) resulted in profitable positions due to timing and strike price placement. Parameter sensitivity analysis showed that a delta of 0.02 offered a more balanced risk-return profile across metrics. The strategy is best suited for investors who can tolerate years of continuous losses, view it as portfolio insurance rather than a primary alpha generator, and seek convexity against extreme downside events. It is not suitable for those seeking stable returns or with low risk tolerance.

marsbit03/16 11:11

If You Bought One Deep OTM Bitcoin Put Option Every Month Since 2018, Could You Make Money in the Long Run?

marsbit03/16 11:11

Mapping Ethereum’s macro sensitivity – Oil, liquidity & why ETH absorbs it all

The Ethereum market is undergoing a significant structural shift, with derivatives now dominating price discovery. Futures trading on major exchanges like Binance has grown to be over 12 times larger than spot trading. This surge in leveraged activity makes the market more fragile, as evidenced by recent liquidations totaling $135 million, which can trigger rapid price cascades. Concurrently, Ethereum is displaying heightened sensitivity to macroeconomic forces. Rising oil prices above $100 and tightening global liquidity are pressuring risk assets. Due to its critical role as $58.54 billion in collateral within DeFi protocols, ETH is deeply embedded in the financial infrastructure. This positions it as a key gauge for macro risk in the altcoin market, causing its price to react more to geopolitical shocks, energy volatility, and institutional hedging flows than purely crypto-native demand.

ambcrypto03/16 10:09

Mapping Ethereum’s macro sensitivity – Oil, liquidity & why ETH absorbs it all

ambcrypto03/16 10:09

Open Interest in Options Exceeds Futures for the First Time: How Are On-Chain Derivatives Approaching the Eve of an Explosion?

The cryptocurrency options market is experiencing significant growth, with Bitcoin options open interest reaching $65 billion in mid-2025, surpassing futures open interest for the first time. This shift highlights increasing institutional demand for defined-risk tools like options over pure leverage instruments. While centralized platforms like Deribit (acquired by Coinbase) and CME’s IBIT options dominate, on-chain derivatives are gaining traction but remain nascent. DeriveXYZ leads in on-chain options with over $700 million in notional trading volume, having evolved from an AMM to a gas-free central limit order book on its own Layer 2. Its portfolio margin system and cross-margin support appeal to institutional users. Similarly, KyanExchange combines order book matching with on-chain portfolio margins and partial liquidation mechanisms. Structured products and hedging needs are driving adoption, as evidenced by the success of options-based yield strategies in TradFi. Regulatory clarity is improving, with recent SEC-CFTC joint statements and legislative progress reducing uncertainty. CME’s planned 24/7 crypto options trading further signals maturation. Though on-chain options are still early, infrastructure and regulatory developments suggest potential for expansion.

比推03/12 14:05

Open Interest in Options Exceeds Futures for the First Time: How Are On-Chain Derivatives Approaching the Eve of an Explosion?

比推03/12 14:05

On the Eve of the Explosion of On-Chain Options

On-Chain Options on the Brink of Breakout The cryptocurrency options market is larger than most realize, with CME's crypto derivatives volume up 46% year-over-year. Institutional investors require defined-risk tools like options for hedging large positions. A pivotal shift occurred in mid-2025 when Bitcoin options open interest reached $65 billion, surpassing futures for the first time, indicating a move from pure leverage to risk-defined instruments. Growth is concentrated on Deribit (now backed by Coinbase after its acquisition) and traditional finance capital via IBIT options. While decentralized derivatives have grown from 2% to over 10% market share in two years, on-chain options remain nascent. @DeriveXYZ leads with over $700 million in notional options volume over 30 days. It has evolved from an AMM to a gas-free central limit order book on its own L2, featuring portfolio margin and cross-margin. @KyanExchange is approaching similarly with on-chain portfolio margining and partial liquidation mechanics. Structured products and asset managers urgently need options for their defined risk/return profiles. Institutional demand is clear, with IBIT options OI surpassing the gold ETF GLD and CME handling $3 trillion in crypto derivatives notional volume in 2025. Regulatory clarity is improving. A joint statement from the SEC and CFTC in 2025 allows regulated exchanges to trade spot crypto assets, and the CLARITY Act has passed the House. This improved environment, alongside CME's planned 24/7 crypto options launch, suggests the timing is finally ripe for on-chain options to flourish.

marsbit03/12 10:29

On the Eve of the Explosion of On-Chain Options

marsbit03/12 10:29

Capital Outflow, Long-Short Balance: Ethena's Ebb Reveals a Rare Signal

The cryptocurrency market has been in a risk-off mode for months. Ethena, a key player in crypto basis trading, has seen its deployed capital—acting as a proxy for excess long demand—plummet to $791 million, just 71% of its 2025 low and 12.9% of its previous peak. This sharp decline reflects a rare market structure where active longs and active shorts are nearly balanced, a historically unstable condition. Ethena’s business model involves taking the short side of perpetual swaps against leveraged long traders, earning funding rates. The drastic reduction in its deployed capital—down over 60% in a month despite relatively stable Bitcoin prices—suggests either unprofitable basis trades are being unwound or increased hedging activity (e.g., VCs and projects hedging small-cap token exposure) is crowding out opportunistic basis traders like Ethena. Perpetual futures, central to crypto leverage, require a 1:1 match between longs and shorts. The current equilibrium indicates exceptionally low speculative long interest and a rise in structural short hedging. This balance is fragile and unlikely to persist, potentially leading to increased volatility. Ethena’s retreat serves as a clear signal of shifting risk appetite and crowded hedging strategies in crypto markets.

比推03/09 14:30

Capital Outflow, Long-Short Balance: Ethena's Ebb Reveals a Rare Signal