Hedge against BitCoin collapse

[shutik]

I believe you have to post only a fraction of the cost of the contact in the range of 15%
This serves as margin. In the event of the move of the spot price above margin threshold you would get margin call and if you don't post more you position gets liquidated

see https://bitcointalk.org/index.php?topic=164255.0 for unofficial FAQ

And please do your own research before investing.

[MilesJohan]

Gold and Silver would be the best hedge, I presume USD to collapse too...

[Feneusens]

Litecoin, primecoin and goldcoin.....

[Thenen]

Food, if Bitcoin collapse USD might also collapse all together....

[Sindelar1938]

One approach couple be to manage the btc% of your total net worth

As btc rises and that percentage increases, sell some btc to get back to your target

[deisik]

One approach couple be to manage the btc% of your total net worth

As btc rises and that percentage increases, sell some btc to get back to your target

And if it falls we should just buy back, right?

[Undefeatable]

One approach couple be to manage the btc% of your total net worth

As btc rises and that percentage increases, sell some btc to get back to your target

And if it falls we should just buy back, right?

That is absolutely right, average down and sell high...

[deisik]

That is absolutely right, average down and sell high...

No better way to lose your money than average down...

[whitemage]

That is absolutely right, average down and sell high...

No better way to lose your money than average down...

Sorry but I don't understand what you are trying to stay, why would it be losing for average down?

[sidhujag]

That is absolutely right, average down and sell high...

No better way to lose your money than average down...

Sorry but I don't understand what you are trying to stay, why would it be losing for average down?

might wanna hedge now $475

[cunicula]

I am looking for the perfect edge against a bitcoin collapse. My biggest fear is selfish mining or some
other hack on the system. Not so much worried about bears, volatility and governments.  

OMG... the selfish mining scare is a ridiculous farce, but hedging is not a bad idea anyways.

I hedge with PPCoin until some better version of proof of stake comes along.
PPC has security features that bitcoin lacks. Bitcoin has security features that PPCoin lacks. And therein lies the hedge.

Disclosure: I have about 70% value in bitcoin, 30% value in PPCoin, and no other coins (well a few primecoin purely for the novelty value)
  

[deisik]

Sorry but I don't understand what you are trying to stay, why would it be losing for average down?

Let's first define what we mean by averaging down!
I mean this, i.e. adding to a losing trade

[shutik]

One approach couple be to manage the btc% of your total net worth

As btc rises and that percentage increases, sell some btc to get back to your target

I like this approach as exposure hedge. Re-balance your investment periodically to achieve risk exposure to bitcoin  with desired percentage level.
Good idea to also diversify your investment among different asset classes.

[AnonyMint]

OMG... the selfish mining scare is a ridiculous farce,

Fact: (unless my logic is refuted)

Disagree. I have refuted your technical arguments on selfish-mining:

https://bitcointalk.org/index.php?topic=323988.msg3607191#msg3607191

[AnonyMint]

Food, if Bitcoin collapse USD might also collapse all together....

Fact:

USD won't collapse (any time soon) because of Bitcoin due to relative size, with Bitcoin in a the $10 billion range and USD in the multiple $10s of trillions range. Bitcoin is a flea on an elephant's arse at the moment.

[AnonyMint]

Gold and Silver would be the best hedge, I presume USD to collapse too...

Level-headed Conjecture:

USD trend (not wiggles) will likely get stronger through 2015, as capital is running from emerging markets to the reserve currency (and Euro) as the commodity bubble has peaked and China (and BRICs) is headed down due to huge imbalances. Read Martin Armstrong and Michael Pettis. India has persistent fiscal deficits and a deteriorating account balance and they are exacerbating it by launching a food subsidy program that will send their annual deficit into the high single digit percentage. (note that I am for letting 400 million suffer in malnutrition)

Gold and silver have not bottomed yet, they may bounce until next Spring, then go down for the final bottom probably under $1000 and $17. Again for same reason as the dollar strength above.

Mildly Extreme Conjecture:

After 2015, the global system will implode, then you will see gold and silver blast off.

I expect Bitcoin to have crashed from its bubble peak by then (roughly 2016 - 2020). Whether it survives or not is yet to be determined based on technical fixes to the protocol and competition.

[byronbb]

Litecoin!

Look at the charts.  When Bitcoin is in it's bubble cycle, move to Litcoin.  When Bitcoin corrects, move back to from Litecoin to Bitcoin.

In other words, buy the undervalued crypto.  Right now Litecoin and Bitcoin are the only real players.

If bitcoin suffered a technical failure then litecoin would most likely suffer it in an identical manner. 

[kdrop22]

I am posting here the possible risks to Bitcoin and strategies for dealing with them.

Risks:
a) A Technical flaw in either the network protocol or private key/public key algo is exposed.
Risk Mitigation: Alt Coins with significantly different POS/ Pow functions
b) New innovative AltCoin is introduced in the future. That takes away market share from BTC. While we don't have such a coin right now, there is likely be one in the future.
Risk Mitigation: Keep yourself well informed and invest small portion of funds into promising technologies.
c) Regulatory risk - This would affect all digital currencies.
Hedge: Portfolio diversification or gold/silver
d) Public panic/sell off - This will affect all AltCoins as most of them are traded for BTC.
Only alternative portfolio diversification.

[waltermot321]

I am posting here the possible risks to Bitcoin and strategies for dealing with them.

Risks:
a) A Technical flaw in either the network protocol or private key/public key algo is exposed.
Risk Mitigation: Alt Coins with significantly different POS/ Pow functions
b) New innovative AltCoin is introduced in the future. That takes away market share from BTC. While we don't have such a coin right now, there is likely be one in the future.
Risk Mitigation: Keep yourself well informed and invest small portion of funds into promising technologies.
c) Regulatory risk - This would affect all digital currencies.
Hedge: Portfolio diversification or gold/silver
d) Public panic/sell off - This will affect all AltCoins as most of them are traded for BTC.
Only alternative portfolio diversification.

I never know there is so much risk to Bitcoin.

[kdrop22]

I am posting here the possible risks to Bitcoin and strategies for dealing with them.

Risks:
a) A Technical flaw in either the network protocol or private key/public key algo is exposed.
Risk Mitigation: Alt Coins with significantly different POS/ Pow functions
b) New innovative AltCoin is introduced in the future. That takes away market share from BTC. While we don't have such a coin right now, there is likely be one in the future.
Risk Mitigation: Keep yourself well informed and invest small portion of funds into promising technologies.
c) Regulatory risk - This would affect all digital currencies.
Hedge: Portfolio diversification or gold/silver
d) Public panic/sell off - This will affect all AltCoins as most of them are traded for BTC.
Only alternative portfolio diversification.

I never know there is so much risk to Bitcoin.

With great risk comes great reward.