Bitcoin Forum

What would the best way to protect my Bitcoin investments against its devaluation or when its market price goes down? I thought about exchanging my BTC to Nubits, but they are not always pegged 100% to the value of fiat. Then there is BITUSD, and Tether but I'm not sure if it would be the safest way to do this. Even if Bitcoin's price goes to the moon, at least I would protect them in case their value goes down.  ;D

Any help would be greatly appreciated.  :D

I have tried figuring out what alts would be best for this for a long time with little success.. I have had some success with DRK/DASH but with the DASH market the way it is now it isn't as good..

I think the only real good way would be to trade BTC for fiat directly, though that can be a PITA to do due to regulations and such. Make sure it's a good exchange with good current price following and enough liquidity for you to get in and back out, but then you are just trading bitcoin which makes hedging in alts moot..

Maybe take a real good look at ETH for this.. 

if you are happy to cash out at $360 (todays price).. then cash out 50%..

if bitcoins rises, then 50% left as bitcoin will profit.. if it falls then you can buy more coin using the fiat your holding from cashing out..
.. its just that simple..

if you are trying to find guaranteed predictions of pumps and dumps to sell right at the top and buy right at the bottom.. or even a service to do this for you... goodluck, keep dreaming.

and if your looking for alts to use as a reserve.. find the cheapest nastiest coin there is. thats valued as close to 0.0000001 as possible.. grab as many as you can and hold.. usually converting to xrp/ltc and then looking for alts that are 0.00000001 of an xrp/ltc means you will own billions of an altcoin that cant go any lower, meaning just going to 0.00000002 is doubling your funds, 0.00000003 is trebling your funds, 0.00000004 is quadrupling your funds

Great advice. Thanks for sharing your recommendations, mate. I guess I would just cashout some of my BTC for fiat, and the rest would be stored on a paper wallet as reserve for the future. Probably Bitcoin's value would rise tenfold and thus it would be greater earnings for me. Still, I would like to see a service (more like a wallet) where I could store my BTC and then it locks up their value for protection against devaluation.  :D

The best way would be a married put, but unfortunately there's still no liquid market for vanilla bitcoin options.

I think if the best option may be gold because gold prices will not move that fast so if we can find a way to easily convert bitcoin to gold and gold to bitcoin than that will be the best option of protect our investments. But as of now I don't know is there any site allows for these exchanges?

Ideally, you would want to swap your bitcoin for something with an opposite trend. There really isn't an asset like that. I would rule out any alts because cryptos are linked. You might be able to find one that do not fall as much, but it would still be worse than converting back to fiat and buying a bond.

Well, there is a service called BitGold where you can buy Gold with your Bitcoins either as a physical form or digitally stored on your BitGold wallet. I haven't used it yet, but it looks like a great idea. I'm still looking for reviews regarding this service before I make any investment.  ;D

I've never used the service before myself, but from what I understand isn't that what Coinapult locks do? https://coinapult.com/faq

Bitcoin's price movement is normally opposite to the price of altcoins. If you have faith in crypto currency, I suggest to consider to invest in crypto coins index like coinoindex which are trading in poloniex and investing in the 20 leading altcoins.

i would simply hold and wait for the price to recover, i can't other better ways that does not coem with the same risk

until you do not sell and wait for you initial target you didn't really lose anything

leverage the price falls

What do you usually do to protect your dollar from devaluing against the euro or other currencies?

Just do that.

In my opinion don't do anything! Just try to increase your bitcoin holdings monthly! Why am I saying this? I really believe this technology is so underrated at the moment by the masses and also heavily underpriced that the boom will happen in the future. When this book happens, all these current price fluctuations will be a minor bump in the road!

Not to mention that you are risking a lot if you hedge and you make a mistake!

I've started getting to know this service and so far it looks very promising. The "Lock" feature locks your current BTC value to a fiat currency of your choice such as USD or EUR. This is amazing. I will try it out. Thanks!  :)

Which is nothing for most people.  :D
I do think OP has a correct mindset, looking for ways to hedge that risk. I believe bitcoin has potential, but it's not free from bubbles and volatility.

Unless I'm much mistaken you can lock your coins to a dollar value via Coinapult inside Mycelium. Dunno whether it's country specific.

you can also lock bitcoin to a dollar value by selling it for dollars..

That's the march of technology for ya. Amazing what we can do these days.

Perhaps you could check which alts lower their BTC value when BTC goes up. If they are POS coins, they will also get some interest when you buy them.

However, as other say it is difficult, and I would prefer to hold the BTC too.

I spent some time earlier this year thinking about hedging against price drops. There are some obvious possibilities people have mentioned:

1. Sell some bitcoins for fiat currencies. One big problem is this usually requires an invasion of your privacy. For example, many exchanges require a lot of information before you can use them and especially before you can withdraw fiat.

2. Sell some bitcoins for a fiat balance and leave it as a balance on the exchange. When you want the funds back, exchange back to bitcoin and withdraw. This is essentially what Coinapult locks do, but you could also use an exchange that doesn't require KYC for crypto-only use. One big problem is that the exchange could go out of business or simply refuse you access to your funds.

Using a little basic algebra, I described a way multisig could be used to buy and sell volatility risk.

https://bitcointalk.org/index.php?topic=1102062 (https://bitcointalk.org/index.php?topic=1102062)

Essentially Alice and Bob can both put $100 worth of bitcoins into a multisig address where each has one private key. The same tx could have an OP_RETURN with a contract they both signed that says: Alice gets $100 worth of these bitcoins next week and Bob gets the rest. (If the price drops by more than half, then it's a "black swan" event and Alice gets all of it, but it's worth less than $100.) Unless there's a "black swan" event a week later Alice will have $100 worth of bitcoins. Bob would profit more if the price went up and lose more if the price went down. Essentially, Alice would be selling her volatility risk to Bob.

The advantage of this is that you don't give up total control of your bitcoins. A disadvantage is that if either Alice or Bob is incapacitated, the funds are lost. This disadvantage can be mitigated by having a 2-of-3 address where the third key is essentially an escrow agent, but then you have to hope the escrow agent isn't secretly either Alice or Bob.

This is all theoretical. I was hoping if I described it someone else would implement it. Lately I've been thinking about doing it myself. I'd probably do it with Clams instead of Bitcoin though. Clams has support for a "speech" part of a tx, and a node for Clams can reasonably be run on a VPS.