Bitcoin was priced at $106,846 before the deadline, with only a 0.3% decline in the past 24 hours, but market sentiment remains tense. On Tuesday morning, crypto trader James Wynn, who has over 200,000 followers on X (formerly Twitter), posted that he has reduced Altcoin spot positions and initiated hedging, stating that a "black swan is approaching". This statement immediately raised alertness in the investment circle.
"I am currently hedging my long positions. I have closed many Altcoin spot positions, and if a black swan event occurs, I am prepared to invest all my funds. Do not fear what is about to happen. Accept it, be prepared, and execute the plan."
Wynn's High-Leverage Past
Wynn was known for trading with 5 to 40 times leverage, losing $60 million in a week when US President Trump threw out tariff threats, causing Bitcoin to plummet unexpectedly. After that incident, he adjusted his strategy, increasing options and futures short positions, and setting strict stop-loss orders.
This time, Wynn's mention of a black swan reminded the market of past painful experiences. In May, he candidly admitted that timing is often more important than direction, "Cash is ammunition, don't regret it when you run out of bullets".
How Do Crypto Investors Typically Hedge?
Facing unknown impacts, institutions and retail investors often use these three tools:
- Options Protection: Buying put options can lock in downside risks. Bitget has previously pointed out that premiums usually account for 2% to 5% of the position, keeping costs controllable.
- Futures Hedging: Shorting perpetual contracts is the most active hedging action on exchanges, especially when the panic index exceeds 60.
- Diversification and Dynamic Rebalancing: Kraken research shows that converting 20% of the portfolio to stablecoins can reduce overall volatility by one-third.
