Using an offsetting position to reduce a defined risk, usually at the cost of fees, basis risk or capped upside.
Hedging is best understood as part of a system rather than as an isolated definition. Its related coordinates show the mechanisms, incentives and historical records that give the term practical meaning.
Hedging describes how participants value, trade or obtain exposure to bitcoin. Market behavior can affect adoption and mining economics, but it does not rewrite consensus rules. Price evidence and protocol evidence answer different questions.
Understanding Hedging helps distinguish a verifiable Bitcoin mechanism or historical record from slogans, products and market narratives.
For the clearest picture, read this entry together with Bitcoin futures, Options, Portfolio risk. The reverse links also lead from Portfolio risk.
Linked to related atlas coordinates
Grounded in a source record
Explains function and trade-offs
Part of the open Bitcoin knowledge graph