How it Works
Learn how Encrypted Energy helps you hedge Bitcoin's downside risk and capitalize on its volatility.
The Encrypted Energy Method
Plan
Your Bitcoin collateral is split into a series of equal option allocations across your contract duration.→
Calibrate
Our system continuously monitors market volatility to optimize option strike prices.→
Execute
Daily options are purchased according to the plan, with market-adjusted strikes.→
Settle
When markets decline below strike prices, profits are calculated and distributed immediately.A systematic approach to monetizing market volatility.
Introducing a methodical process that converts your Bitcoin into regular downside protection, turning volatility into sensible risk-reward opportunity.
| On your own... | ||
|---|---|---|
| 1 | Research option strategies and market mechanics | |
| 2 | Monitor Bitcoin volatility and price movements continuously | |
| 3 | Calculate optimal strike prices based on market conditions | |
| 4 | Set up multiple exchange accounts for best execution | |
| 5 | Execute daily PUT option purchases | |
| 6 | Track expiring contracts and payoff amounts | |
| 7 | Calculate daily P&L and track performance | |
| 8 | Manage cash settlements and withdrawals | |
| With Encrypted Energy... | |
|---|---|
| 1 | Create new Downside Volatility Hedge Contract |
| 2 | Fund your Contract |
| 3 | Receive daily payouts when markets dump |
Only 3 easy steps—the fast-track to volatility monetization.
Turn market volatility into opportunity with a proven, systematic strategy, reliable execution infrastructure, and an experienced partner managing your Bitcoin hedges every step of the way.
The results speak for themselves:
| On your own... | With Encrypted Energy... | |
|---|---|---|
| Time Required | Months | Days |
| Execution Risk | High | Low |
| Bitcoin Directional Risk | Irresponsibly Long | Responsibly Hedged |
| Expected Returns | Sporadic | Consistent |
*Past performance does not guarantee future results.
How does the Encrypted Energy strike optimization algorithm work?
Expected volatility is the single factor that most affects a short-dated option's performance. Our systems continuously monitor volatility among other Bitcoin market dynamics and adjust strike prices daily for optimal positioning.
Examples of data that are considered before determining to rebalance:
Target Strike Price Considerations
Volatility Levels
Historical and implied volatility measures that indicate the magnitude of potential price movements.
Price Momentum
Recent price action and trading patterns that could signal key price levels.
Option Greeks
Critical measures like Delta and premium levels for optimal strike selection.
Market Liquidity
Bitcoin trading activity across major exchanges to gauge market depth and liquidity.
Borrowing Demand
The aggregate Bitcoin traders have obtained on loan for leveraged trades.
Time-based Trends
Futures expiration dates, time of the week, time of day, one-time events, holidays, etc.
Where do the payoffs come from?
Market makers on exchanges such as Binance, Deribit, and PowerTrade as well as numerous hedge funds and other institutional and individual investors, sell options contracts all the time for a variety of reasons. Whether to hedge their own Bitcoin holdings, capture volatility premiums, or provide market liquidity, there's always participants ready to sell exposure to the market.
Especially as Bitcoin has grown into a trillion-dollar asset class, its dramatic price swings create constant demand for both buying and selling options. Just as the S&P 500's options markets have become increasingly liquid with its long-term growth, Bitcoin's maturity has only increased the depth of its options markets.
But wait, there's more...
In-kind payoffs and rolling options.
Payoffs earned from your contracts are paid out using Bitcoin-native Lightning payments.
Let your contracts ride the long term trends, 'set and forget', by automatically funneling your payoffs into subsequent contracts. Qualified investors only. Contact our team for additional details.
Don't take our word for it.
Our customers range from institutional investors to wealthy individuals. In every case, we've helped them to hedge their Bitcoin exposure with just a few clicks.
"Encrypted Energy helped us realize that the Bitcoin ETFs individually are never one-size-fits-all; borrowing demand for each ETF is different. With their help, our lending yield increased 30% virtually overnight."
Herwig K. — InvestReady, Founder & CEO
What's next?
Start your Encrypted Energy journey now by creating a free account to get started.
Get access to our UI for creating a new Hedge Contract, detailed tracking of your Contract's performance, and an API to automate the Contract creation process or extract reporting data.
View a complete reference of the most significant risk factors associated with investing in one of our speculative Bitcoin Volatility Hedge Contracts.
Quickly create a new Hedge Contract and fund it with spot Bitcoin once it is approved, then sit back and watch the results.
Or continue exploring.
View Historical Options Payoffs, view our Frequently Asked Questions, or read the latest news on our Blog.