Hedging strategies using Bitcoin futures. This research will Examine how institutional investors use Bitcoin futures to hedge against price volatility in the cryptocurrency market
Year: 2024
Type: article
Abstract: Cryptocurrency markets are renowned for their extreme price volatility, which poses significant risks to investors. This research explores the use of Bitcoin futures as a hedging instrument by institutional investors to mitigate such risks. The study examines the effectiveness of Bitcoin futures in reducing portfolio volatility while maintaining exposure to the cryptocurrency market. By analyzing trading patterns, risk management strategies, and the underlying mechanics of Bitcoin futures contracts, the research highlights how institutional players navigate the complexities of cryptocurrency price fluctuations.Furthermore, the study investigates the challenges associated with using Bitcoin futures, including liquidity constraints, regulatory considerations, and market inefficiencies. Insights from this research contribute to a better understanding of risk mitigation techniques in emerging financial markets and offer practical implications for investment managers seeking to optimize their portfolios. Ultimately, this research provides a comprehensive evaluation of Bitcoin futures as a viable tool for hedging against the unpredictable nature of cryptocurrency markets, bridging the gap between traditional finance principles and digital asset management.
Author: Duodu, Christian Budu
Language: English
Subfield: Information Systems
Field: Computer Science
Domain: Physical Sciences
Open Access status: green
OpenAlex ID: W6949508291
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