# 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.

No breakout yet – Why Bitcoin traders are on the defensive before the New Year

Bitcoin is poised to end 2025 in negative territory unless it closes above $94,000 by year-end, having declined 5.7% this year. Traders remain defensive amid choppy market conditions, with options data indicating strong demand for downside protection and a cautious institutional stance. U.S. spot Bitcoin ETFs saw record outflows of $5.5 billion in Q4 2025, largely driven by hedge funds exiting basis trades as yields dropped. Despite this, long-term investor conviction remains relatively intact. Market direction may stay muted until liquidity returns and key events, such as the MSCI index review in mid-January, are resolved. Bitcoin continues to trade range-bound between $85,000 and $94,000, with a breakout unlikely before early 2026.

ambcrypto12/30 05:02

No breakout yet – Why Bitcoin traders are on the defensive before the New Year

ambcrypto12/30 05:02

The Advancing MM 1: Market Maker Inventory Quoting System

The article "Advancing MM 1: Market Maker Inventory Quoting System" explains why retail traders often experience price movements against their positions after buying altcoins. It argues this is not due to market manipulation but is a result of automated market maker (MM) systems responding to inventory risk and toxic order flow. When traders place large buy orders, MMs sell inventory, creating a short exposure. To mitigate this risk, MMs adjust their pricing using the Avellaneda-Stoikov model. They skew quotes lower to attract sellers and widen spreads to reduce transaction probability, aiming to return inventory to a balanced state while protecting against adverse selection. The reservation price, central to this model, is calculated as the mid-price adjusted by inventory levels and risk aversion. The article notes that retail traders are particularly affected because their orders are often large, concentrated, and not hedged—especially in low-liquidity altcoins. A suggested strategy for traders is to break large orders into smaller, less detectable increments, allowing them to buy at progressively better prices as the MM’s quoting system reacts. The post teasers follow-up articles on order book dynamics and toxic flow.

marsbit12/28 04:18

The Advancing MM 1: Market Maker Inventory Quoting System

marsbit12/28 04:18

Gold and Silver Repeatedly Hit New Highs, Why Has Bitcoin Fallen Instead of Rising?

In 2025, precious metals surged dramatically, with silver breaking above $50 and reaching a record high of $72/oz, gaining 143% annually, while gold hit $4,524.30/oz with a 70% yearly increase. In contrast, Bitcoin fell 8% year-to-date to $87,498, down 30% from its October peak of $126,000. This divergence challenges the "digital gold" narrative, as macro tailwinds driving metals—such as a weaker USD, Fed rate cut expectations, and geopolitical risks—did not extend to cryptocurrencies. Investors preferred established safe havens like gold and silver, with central banks and retail buyers increasing physical holdings. Studies confirmed gold's stability during macro shocks, while Bitcoin behaved more as a high-beta risk asset, correlating with equities. Structural demand differences widened the gap: silver benefited from both safe-haven and industrial demand (e.g., solar panels, electronics), whereas Bitcoin lacks real-world utility and relies solely on financial speculation and on-chain settlements. Without industrial demand, Bitcoin depends on ETF inflows, which have recently turned negative. Silver's rally reflects macro pricing of low real rates and a weak dollar, underscoring Bitcoin's exclusion from the hard asset system. For Bitcoin to recover, clearer regulation, renewed institutional interest, or heightened appreciation of its censorship-resistant features may be needed. However, silver's crowded positioning poses indirect risks to Bitcoin if volatility spikes. The 2025 divergence shows Bitcoin has not yet achieved "hard asset" status. While it may outperform under specific conditions, it currently lacks the institutional trust and industrial utility that support precious metals.

marsbit12/26 05:57

Gold and Silver Repeatedly Hit New Highs, Why Has Bitcoin Fallen Instead of Rising?

marsbit12/26 05:57

When Funds Flow into Gold and Silver, Bitcoin Is Temporarily Left Behind

In 2025, precious metals surged dramatically, with silver rising parabolically to a record $72/oz and gold reaching $4524.30/oz, up 143% and 70% annually, respectively. In contrast, Bitcoin fell 8% year-to-date and dropped 30% from its October peak. This divergence challenges the "digital gold" narrative, as traditional safe-haven drivers—such as a weaker dollar, Fed rate cut expectations, and geopolitical risks—failed to boost Bitcoin. Investors preferred tangible assets like gold and silver, which benefit from institutional credibility and, in silver’s case, robust industrial demand from sectors like solar and electronics. Bitcoin, lacking industrial utility and relying on speculative and financial demand, struggled as ETF flows turned negative. While Bitcoin’s potential remains tied to future regulatory clarity or unique features like censorship resistance, it has yet to be integrated into the hard asset ecosystem. The 2025 trend underscores that macroeconomic tailwinds do not automatically extend to cryptocurrencies.

比推12/26 05:16

When Funds Flow into Gold and Silver, Bitcoin Is Temporarily Left Behind

比推12/26 05:16

Why Bitcoin shorts look confident now, even as $90K looms

Despite Bitcoin's potential to reach $90K, short sellers are exhibiting strong confidence due to a significant 23% price drop in Q4 and waning institutional demand. U.S. Spot ETFs have seen consecutive daily net outflows since mid-December, while Open Interest on the CME has fallen below $10 billion for the first time since September 2024, signaling a risk-off shift. The decline is partly attributed to the breakdown of the basis trade, whose yield has dropped from 10% to around 5%, making it less attractive. Analysts project a potential drop below $80K in early 2026 if weak sentiment persists. However, a surge to $90,600 could liquidate $3 billion in leveraged shorts. Options trading indicates a range-bound market with key levels at $85K for a dip and $88K-$90K for a rally.

ambcrypto12/25 22:02

Why Bitcoin shorts look confident now, even as $90K looms

ambcrypto12/25 22:02

Bitcoin price discovery has shifted decisively to derivatives markets

Based on a CoinGlass report, Bitcoin's price discovery has decisively shifted from spot trading to derivatives markets. Futures, perpetual swaps, and options now account for the majority of trading activity, with their volume consistently exceeding spot volume. Consequently, short-term price direction is increasingly determined by leverage, positioning, and hedging behavior rather than direct buying or selling of Bitcoin. This represents a structural shift from earlier cycles, making the market's behavior more akin to traditional macro assets. While this can lead to calmer surface-level price action, it masks underlying risks, increasing the potential for abrupt, volatility spikes triggered by funding stress or liquidation cascades. For participants, monitoring derivatives metrics has become more critical than tracking spot flows alone.

ambcrypto12/25 17:02

Bitcoin price discovery has shifted decisively to derivatives markets

ambcrypto12/25 17:02

Gold Prices Are Soaring Again and Again. Can Ordinary People Still Get on Board?

The price of gold has surged dramatically, rising from around $2,600 per ounce at the start of 2025 to over $4,400, while domestic prices in China broke through the ¥900–1,000 per gram mark. Against a backdrop of economic uncertainty, low returns on savings and wealth management products, and volatile equity markets, gold is re-emerging as a preferred asset for both individual and institutional investors. Gold serves as a reliable store of value and a hedge against instability, with its price often moving independently of stocks and bonds. Its historical role as a universal monetary asset makes it particularly attractive during periods of geopolitical tension and inflation. Over the past 20 years, gold denominated in RMB has delivered an average annual return of over 10%, outperforming many traditional investments. The concept of “gold+” is gaining traction—referring to multi-asset investment products that include a strategic allocation to gold (often 5–10%) alongside equities, bonds, and other assets. These products are designed to reduce volatility, improve risk-adjusted returns, and simplify decision-making for retail investors who may lack the expertise or discipline to manage gold exposure independently. Examples show that a portfolio with a 10% allocation to gold would have significantly outperformed a pure equity portfolio over the past decade. By integrating gold into a diversified strategy, “gold+” products offer a structured, long-term approach to wealth preservation and growth, making gold’s stability and defensive qualities accessible to everyday investors.

深潮12/23 06:52

Gold Prices Are Soaring Again and Again. Can Ordinary People Still Get on Board?

深潮12/23 06:52

CME's Cryptocurrency Portal

CME's Cryptocurrency Portal: CFTC's recent approval for CFTC-registered exchanges to list spot cryptocurrency products could pave the way for major platforms like CME to enter the market. This move may attract significant institutional capital from traditional markets into crypto, leveraging CME’s established trust, regulatory compliance, and infrastructure. CME already handles substantial crypto derivatives volume, with record daily contracts and growing year-over-year activity. Integrating spot trading could streamline hedging, reduce operational friction, and offer a regulated alternative to offshore platforms. It may also redefine "spot" for large traders who prioritize custody, settlement, and stability over mere price exposure. Additionally, shifting leveraged trading to regulated venues like CME could enhance transparency and consumer protection, reducing risks seen in events like the recent $19B liquidation crash. While initial adoption may be conservative, this step could gradually build trust and open crypto to broader, safer institutional participation.

marsbit12/23 01:57

Prediction Markets: An Extended Form of Binary Options?

After observing prediction markets, it is increasingly evident that they share significant similarities with binary options. In many respects, prediction markets can be viewed as an extended form of binary options. Both utilize binary (yes/no) contracts where the price fluctuates between 0 and 1, reflecting the market's consensus probability of an event occurring. For instance, a price of 0.7 indicates a perceived 70% likelihood. At expiration, the contract settles at 1 if the event occurs and 0 otherwise—mirroring the payoff structure of binary options. The core of both systems lies in forecasting binary outcomes and using market prices to estimate event probabilities. They aggregate collective intelligence, allow speculation, and enable risk management. However, differences exist: prediction markets cover a broader range of verifiable events (e.g., weather, elections, or box office results) with flexible timeframes, while binary options are primarily focused on short-term financial asset movements (e.g., stocks or currencies). Additionally, binary options are often more speculative and face stricter financial regulations in regions like the EU and the US. Prediction markets, though currently less regulated (especially in crypto), emphasize accuracy and may eventually come under regulatory scrutiny due to concerns like market manipulation. These distinctions could lead to divergent regulatory and developmental paths in the future.

marsbit12/22 12:05

Prediction Markets: An Extended Form of Binary Options?

marsbit12/22 12:05

Introducing: Taker-Flow-Based Gamma Exposure

This article introduces a Taker-Flow-Based Gamma Exposure (GEX) model specifically designed for crypto options markets. Unlike traditional equity markets, crypto options have different participant behaviors and data availability, making classic GEX heuristics inaccurate. The new methodology leverages the unique transparency of crypto exchanges, where the taker of each trade is identifiable, to reconstruct actual dealer positioning by mirroring cumulative taker flows. This flow-based approach provides a realistic, net view of dealer gamma exposure across strikes and maturities. The resulting GEX metric helps identify price zones where dealer hedging flows are likely to stabilize (positive gamma) or destabilize (negative gamma) the market, offering traders a map to anticipate volatility regimes and potential pinning effects. The model is available for major cryptocurrencies on Deribit.

insights.glassnode12/18 17:16

Introducing: Taker-Flow-Based Gamma Exposure