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  1. Strategies

Hedge against the bear market

PreviousComparing the StrategiesNextCross-Chain Operations

Last updated 12 days ago

offers an innovate hedging strategy to protect the current USD value of your Bitcoin in the the case of a bear market whilst leaving you exposed to the upside of a continued bull market.

When you refinance you receive a Bitcoin mortgage to match your refinancing amount plus the current USD value of your Bitcoin in yield bearing tokens. In the case of a bear market you can simply allow your mortgage to and retain your earn position which will continue to earn yield until you decide to convert back to stables in the soft-pegged uniswap v4 liquidity pool. In the case of a continued bull market you can keep the mortgage from defaulting by making regular payments funded by the yield earned in your earn position. This means that the Bitcoin held in your mortgage can continue to benefit from the upside price appreciation the bull market delivers. What happens if Bitcoin just keeps going up and I want to hedge at Bitcoins higher USD value? In this scenario you can use the early repayment feature to release the Bitcoin in your mortgage, then refinance at the new market value of Bitcoin, freezing it's value within the new Earn position you'll receive.

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