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In this review I cover Hedged Bitcoin from Uphold and Ternary Intelligence, a safer investment account for reduced risk exposure when investing in this king cryptocurrency.
Bitcoin keeps making the news every day as the blockchain asset hits a new low one week and a few months later it reaches all-time highs. Even with the volatility, Bitcoin is becoming a interesting mainstream opportunity for many people looking to enter investing in cryptocurrencies.
Update: You can also earn compound interest on your Bitcoin holdings now with BlockFi. Click here to learn more about a special interest account for Bitcoin holders in my BlockFi review.
When I first found Hedged Bitcoin on Uphold, it came from my research trying to find a safer way to invest in Bitcoin with limited downside risk because of the extreme ups and downs that the asset experiences.
I thought about it constantly…
Bitcoin is big and it is going to get bigger, but how to take advantage of the upside without risking my initial investment?
Needless to say, I was excited when I came across Hedged Bitcoin and this is my review on the service from Ternary Intelligence through Uphold.
I am going to carry you through my own research that I did to decide whether opening an account with the service was right or not, all the way to how Hedged Bitcoin is performing and living up to the claims of protecting your investment. Let’s take a look.
What is Hedged Bitcoin Exactly?
Hedged Bitcoin was developed by Ternary Intelligence as proprietary market instability detection technology. It is used to anticipate severe market corrections based on investor herding patterns that are tracked.
Message from Ternary Intelligence:
The Hedged Bitcoin strategy does not involve some static lag with respect to the Bitcoin market. Instead, there are multiple conditions to be met for increasing the Bitcoin exposure and several metrics for reducing it.
The most notable ones being our market instability detection metrics. Therefore, sometimes the Bitcoin market rallies for some time until a set of conditions is met and the Hedged Bitcoin increases its exposure in gradual steps.
And then often times the strategy moves more into US dollars following some market gains if an instability is detected. This may result in the price lagging the Bitcoin price, but it also helps reduce dramatic drawdowns as seen from a historical perspective.
There are also times when the Bitcoin price drops nearly instantaneously (typically driven by a “whale” sell order) without any instability build up prior to that drop. In those cases, if the drop continues, our risk management safeguards reduce the Bitcoin exposure.
Once reduced, the exposure will not be restored until a set of conditions mentioned above is met. When that happens, you may see some recovery in the Bitcoin price but not to the same extent (yet) in the Hedged Bitcoin case.
What often also happens is the Bitcoin price dropping further but Hedged Bitcoin reducing that drop by at least 60%. Some of those scenarios happened recently resulting in the correlations you mentioned.
Overall, the strategy follows a set of consistent rules that have shown significant risk reduction in the long term, while short-term observations of course differ between different time periods.
More on the strategy…
The algorithmic strategy modulates your invest exposure dynamically based on a systematic market analysis. The service offers a balance between the upside potential and reduced drawdowns.
Anyone can participate and considering no investor accreditation is required, or minimum investment, it makes Hedged Bitcoin available globally as a web and mobile application run on Uphold. Giving the average investor the power of hedging.
How is Uphold Involved?
On the Uphold side, their service acts as the gateway for moving your funds into the Hedged Bitcoin service. Uphold simply is the middle-tech to receive your form of deposit like USD from your bank account, and allows Hedged Bitcoin to withdraw your funds for investing in their service.
You will need to setup your Uphold account first. Uphold membership is free, and they have members in over 174 countries around the world who participate in their transparent digital money platform.
Who is Behind Ternary Intelligence?
Hedged Bitcoin is a product of Ternary Intelligence, founded by Chief Executive Officer Beau Giannini, Ph.D. and Chief Science and Technology Officer Pavel Paramonov, Ph.D. Their focus at Ternary is blending computational physics, complex systems research, and technology management with entrepreneurial flexibility and persistence.
As I believe extensive due diligence should be placed when investing, I have found as many details as I could on both of these individuals so you can make your own informed decision after reading this Hedged Bitcoin review, should you decide to invest yourself.
You will find links to suggested additional research and reviews in the citation section below.
How Hedged Bitcoin is Performing and My Personal Review
The service has been tested over the past five years. The testing showed that the Hedged Bitcoin strategy delivers a 95% average compound annual growth rate of traditional buy and hold bitcoin, and has less than a third of the downside other investors would see.
As an example, a Bitcoin investor holding $10,000.00 in Bitcoin as of November 1, 2018, would have seen their holdings plummet to $6,700.00 by November 30, 2018. That is about a 33% loss on their Bitcoin investment in only a month.
Had that same investor placed their funds in Hedged Bitcoin during the same time period, their investment would have been protected from the drop and saved thousands, experiencing a much milder downturn of less than 10%.
This example result also reflects my own personal experience in using the Hedged Bitcoin service is some of the more recent volatility shifts in the cryptocurrency market.
I have monitored the performance daily during both pullbacks and surges, and I have been very impressed with the service. It appears to be working just as designed and as advertised and I plan to continue with keeping my investment with Hedged Bitcoin through Uphold.
- A safer way to invest in bitcoin backed by the science of complex systems.
- Smoothing the Bitcoin ride: Long-term appreciation with a limited downside risk.
- Beau Giannini – Berkeley Haas – University of California, Berkeley
- Beau Giannini, PhD | Influencer World Ranking.
- Beau Giannini, PhD – San Francisco, California | Professional Profile
- Pavel Paramonov, PhD – Founder, Chief Science and Technology
- Pavel Paramonov, PhD, Computational scientist and entrepreneur with a multi-disciplinary vision.
- Pavel Paramonov – Physics Department – The University of Akron
- Powered By LEAN: Ternary Intelligence.
- New app makes sophisticated risk-mitigation technology developed for top hedge funds available to consumers worldwide
Listen to the Podcast that goes with this article.
Watch the YouTube video that goes with this article.