Bumper

TLDR:<ul><li>Bitcoin saw a 17% drop during the ETF announcement period</li><li>Bumper-hedged position premiums cost an average of 0.1% of position size (5% annualised)</li><li>This cost was 96% cheaper than observed put options premiums (via Deribit) for equivalent positions</li><li>Bumper users saw, on average, a 9% price drop over the period of their hedge position. But the value of their position only dropped 1% as they were protected at a 99% floor.</li></ul>In the recent whirlwind surrounding the approval of Bitcoin ETFs by the SEC, crypto enthusiasts experienced heightened speculation and market volatility. On January 11, 2024, the SEC approved multiple spot Bitcoin ETF filings, triggering both excitement and chaos in the crypto space.Anticipating this announcement, discussions in our trading chat explored strategies for hedging wBTC with Bumper, a risk management tool gaining traction in the market. The subsequent Bitcoin price drop, a 17% fall over seven days, validated the wisdom of using Bumper to hedge positions.As Bitcoin&#39;s value dropped from around $48,000 to nearly $41,000 those who had hedged with Bumper found themselves in a favourable position, able to claim USDT and strategically navigate the market downturn.Bumper users saw, on average, a 9% price drop over the term of their position. But having opened a hedge position with a 99% floor, the value of their position only dropped 1%.Throughout this period, Bumper&#39;s protocol remained solvent, displaying stability with a consistent Total Value Locked (TVL). The critical process of rebalancing ensured the system&#39;s efficiency by dynamically adjusting liquidity between Taker and Maker pools, responding to market conditions.Data from the protocol showed several positions opened close to the market&#39;s peak, and revealed remarkably low premiums. A comparison with Put Options on Deribit demonstrated that Bumper provided a more cost-effective solution, with 96% premium saving.As the protocol continues to refine its operations, maintaining competitive premiums and attractive yields for Makers, the numbers underscore Bumper&#39;s efficacy in providing a novel and cost-effective approach to trading on downside volatility.Bumper&#39;s success in reducing premiums during a tumultuous market scenario not only solidifies its position as a reliable risk management tool but also hints at future opportunities. As we look ahead, with the Bitcoin halving and a potential ETH ETF announcement on the horizon, Bumper emerges as a strategic ally in navigating and mitigating downside volatility in the ever-evolving crypto landscape.

Bumper's Impressive Performance: Slashing Hedging Premiums Amidst BTC ETF Chaos

Bumper

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