Today is the first Wednesday of November, and Bitcoin has reached a new all-time high. It’s time for another round of Bitcoin accumulation review. In this session, we’ll mainly discuss how, after hedging with contracts, you can buy more BTC at lower prices to create a snowball effect, all while staying safe from a price drop.

Let's first take a look at the current position. You can also check the real-time status at any time through this link.

1. Accumulation Position

Since establishing the position on May 28, five months have passed. Let's check the current status of my leveraged accumulation: I currently hold 0.20008 BTC, with a loan of 8299 USDC, giving a total value of $5498.64.

As everyone knows, the lowest BTC price in the past 5 months has fallen below $50,000. Although my position is relatively safe due to the contract hedging, because the hedging wasn’t perfect, I wasn’t able to buy enough BTC at low prices. This is because Drift platform uses dynamic adjustments for BTC collateral ratios, and more aggressive hedging is needed to avoid such issues.

2. Increasing the Hedge

To avoid missing the opportunity to buy BTC at a low price, I decided to increase the hedge size from 750 USDT to 1500 USDT.

On October 29, 2024, the opportunity came. BTC rose back above $70,000, and I took the chance to sell more contracts, as shown below.

Here is the current contract hedge situation. Except for SUI, which has a loss of 560 USDT, all other positions are in profit.

Additionally, apart from reducing the risk of liquidation in a price drop, contract hedging also provides a nice income from funding rates. To date, the funding rate income has accumulated to $346.5, as shown in the chart below.

The reason for selling more contracts is not to chase funding rate income, but to achieve continuous rebalancing, ensuring that I can buy more BTC when the price is low.

So, how much BTC should you buy when the price is low? And how much should you sell when the price is high?

3. Rebalancing Rules

To further enhance the efficiency of capital usage, I’ve decided to only hold BTC, and no longer hold JLP. If you want to use the BTC-JLP rebalancing strategy, I recommend using ARP2 (details here).

First, I need to clarify that this Bitcoin accumulation strategy differs from general rebalancing in three key ways:

1. This strategy only buys BTC, without selling. When to sell is controlled by a new set of indicators, which will be explained later.

2. The purpose of rebalancing is mainly to control greed and limit the amount purchased.

3. This strategy only holds BTC, without holding any other cryptocurrencies.

To implement rebalancing while only holding BTC, I set the starting point on October 30, 2024, when the BTC price was $72,535, very close to the $73,737 peak.

At that time, I held 0.2008 BTC, valued at about $15,107. For easier rebalancing calculation, I simulated creating an asset portfolio of BTC and USDC, with 70% BTC and 30% USDC. The total value of this portfolio was calculated at $21,581, with $6,474 in USDC, as shown below.

You might wonder, where is the 30% USDC? Actually, assets and liabilities can be interchangeable. Simply put, the current USDC liability is $8,299. If the liability is adjusted to $14,762, the extra $6,474 is considered an asset.

Looking at the table above, the number 932 in the circle represents the amount of BTC I should buy if the BTC price drops to $12,000. The goal of rebalancing is to determine how much BTC to buy, so I don't get too greedy.

To adhere to the principle of buying only and not selling, every time BTC reaches a new high, I will update the starting value. As for when to start selling? That will be explained in detail later, and it’s also based on a time-tested indicator.

In addition, I also have a BTC-ETH rebalancing strategy on Gate, and a PAXG-BTC rebalancing strategy on Binance, which I’ll cover in the next review.

Conclusion

The effectiveness of contract hedging has exceeded my expectations, which is why I’m willing to increase the hedge size again. From a long-term perspective, only a few crypto assets will survive, and BTC is the most recognized and regulated asset, with broad consensus and long-term survival potential.

If you still don’t own BTC, don’t hesitate—act now. Here’s a beginner-friendly guide on how to buy BTC.

Past Reviews:

• October 9, 2024: Impulse is the Devil

• September 4, 2024 Review: Perception Determines Profits: A New Strategy for BTC Holding

• August 7, 2024 Review: Bitcoin’s Big Drop – Did Leveraged BTC Holding Collapse?

• July 1, 2024 Review: BTC Holding Review: How Did DeFi Strategies Perform?

• June 5, 2024 Opening: [Live Trading] How to Properly Hold Bitcoin and Not Miss the DeFi Boom

About Airdrop Reference

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