How can one "protect" his/her crypto position against a sudden meltdown ?

[bercy]

Let's say one has been fortunate enough to accumulate a sizable amount in cryptocurrencies.

Is there any financial product one can buy to "insure" against a sudden meltdown in crypto valuations ?

Please be specific if you can, add example if possible ?

Will the upcoming products from CBOE /CME be useful for that purpose ?

Thanks.

[uslfd]

Let's say one has been fortunate enough to accumulate a sizable amount in cryptocurrencies.

Is there any financial product one can buy to "insure" against a sudden meltdown in crypto valuations ?

Please be specific if you can, add example if possible ?

Will the upcoming products from CBOE /CME be useful for that purpose ?

Thanks.

No, right now, not yet.

However maybe  in the near future with CME futures laucnhing, there will be BTC options very soon but I think the premium will be very high - that's because BTC volatility is so high buying an option in BTC will be very expensive.

[soham]

This method of securing your investment is known as hedging and unfortunately we don't yet have any hedging method or asset available in crypto world. Because the trend shows that whenever the bitcoin price takes a hit, the other crypto currencies also take the same hit or even worse. That's why it is always advisable not to put all your savings in crypto currency only. Have a major percentage in real-world investment like stocks, bonds or government securities. Use the minor percentage to Cryptocurrency.

I suggest to invest in precious metals like gold or silver along with Cryptocurrency just to protect your capital. Gold or silver may not appreciate much, but the value will not go down as well. So these are excellent hedging option.

So if your sole intention to protect your investment during hard times, buy similar values of digital gold along with Cryptocurrency investment. It will ensure liquidity during hard times.

[jseverson]

There is no way to do this at the moment. You have to keep in mind that cryptocurrency as a whole is still in its infancy. Bitcoin isn't even a decade old. There have been no precedents of how the actual market acts thus far, so I would imagine it would be insanely risky to try to insure it.

You could try to "diversify" to soften the blow, but cryptocurrencies seem to be bundled up for the most part. A Bitcoin crash would almost certainly also result into altcoins crashing, as they're pretty much one and the same to some people's eyes. If you feel like it's too risky for you, then cash out a portion just so you don't get left with nothing should disaster strike.

[bercy]

I imagine this changes things ?

https://www.bloomberg.com/news/articles/2017-12-01/bitcoin-futures-to-start-trading-as-regulators-rush-to-catch-up