ViaBTC Pool: How did veteran miners operate on the eve of Bitcoin's plunge?

Novice miner: "What should I do if I predict a sharp drop in Bitcoin prices?"

Old miner: "Sell some coins to cover electricity costs, and keep hoarding the rest."

Little White Miner: "Why does it keep falling?"

Old miner: "Go hedge!"

Recently, due to the possibility of "Grayscale not working on Thanksgiving Day" , BTC and competing coins have plunged across the board, and both the mining and coin circles are on high alert. However , during the period of sharp decline and shock, if no measures are taken, miners will just follow the market, and their profits will be higher when the market rises, and their profits will drop sharply when the market falls. This is indeed too passive . But after miners learn to use the magical operation of "hedging" , this situation will change completely. If miners judge that the coin price is at the high point of the range , they can sell the mining output for a period of time in the future and lock in profits in advance.

For example :

Before the crash on November 25, 2020 , the price of Bitcoin rose to $ 19,420 . At this time, if miners judged that there would still be huge resistance to the price breaking through 20,000 , they could hedge their mining output for the next two months (assuming a total of 10 bitcoins) at a high level.

Miners can borrow 10 BTC through the mining pool's " hedging " service , sell them at a high price (US$19,420), and then gradually return the mining output to the mining pool in the future .

If the coin price falls as expected, miners can successfully hedge at a high level and lock in profits in advance, which not only ensures sufficient cash flow, but also significantly shortens the payback period of mining.

Microbit Mining Pool - "Hedging" Service

ViaBTC Pool is an industry leader that can provide " hedging" services . Compared with hedging in traditional financial markets, the hedging services provided by ViaBTC Pool are more in line with the needs of mining pool users and are more practical.

ViaBTC Pool currently supports hedging of BTC , BCH, BSV, ETH, and LTC . All hedging currencies are denominated in USDT, that is, USDT is the denominated currency. Currently, each currency only provides a fixed 6x leverage (i.e., the initial margin rate is 20%), and the leverage multiple cannot be adjusted by yourself.

Finally, in order to cater to the long-term holding needs of miners, the hedging business provided by ViaBTC does not have a specified expiration date and no delivery will occur. Without forced liquidation, miners can decide whether to continue holding the position based on their own circumstances.

At present, the daily interest rate of hedging business is as low as 0.05% , and the daily interest is calculated on a simple basis. When repaying the currency or ending the order, the interest is repaid first, and then the principal. It is worth noting that it fully supports borrowing and repaying at any time, and the interest is only calculated on the actual borrowed currency!

What are the advantages of "hedging" in the Microbit Mining Pool ?

1. Better matching: ViaBTC hedging service sets the maximum hedging amount based on each user’s actual mining output to ensure that hedging matches mining output;

2. More convenient: ViaBTC hedging business provides automatic currency repayment service. After the automatic currency repayment function is turned on, the daily mining output can be automatically transferred to the hedging account for currency repayment, eliminating the trouble of manual transfer;

3. Faster: ViaBTC hedging business uses the hedging currency as the initial margin and USDT as the settlement fund, which is more in line with usage habits and faster to obtain stable returns.

If you want to know more about the hedging content of the Microbit Mining Pool, you can see the following official announcement:

How to use "hedging"?

https://support.viabtc.com/hc/categories/900000173066