Bitcoin Portfolio Hedging Using Protective Put Options

© Dunay et al. This article is distributed under the terms of the Creative Commons Attribution 4.0 International License, which permits unrestricted use, distribution, and redistribution in any medium, provided that the original author and source are credited. Bitcoin is a relatively new and attractive asset. It is used for peer-to-peer transactions and is built upon an interesting system called the Blockchain which allows for fast and secure transactions between users. Although Bitcoin and its underlying infrastructure show a lot of potential for growth and innovation, many users of the so-called “cryptocurrency” are wary of holding it instead of other currencies such as the U.S. dollar because of the high volatility exhibited in the price of Bitcoin.