Introducing Mutual Insurance

Bitcoin has a reputation for being a volatile asset. When you also factor in the current economic climate and speculation surrounding the recent Bitcoin halving, wild price swings are often the order of the day.

This can be a problem for traders. What if the price moves against your position? In a worst-case scenario, that could mean liquidation. That’s where our new Mutual Insurance function can help.  

Offering a solution

We are pleased to announce a new feature — Mutual Insurance, a risk management tool that enables traders to hedge against unfavorable market movements. In the event that a user experiences loss on their insured position (within the effective period of the insurance), the user will receive a payoff from the mutual insurance fund.

We offer protection to either a long or short position.

A trader with a long BTCUSD position can purchase long protection to hedge against potential downside risk.

A trader with a short BTCUSD position can purchase short protection to hedge against potential upside risk.

What are the main features of Mutual Insurance?

Traders can take out insurance for periods of 2 hours, 12 hours, or 48 hours. 

Traders can also decide to take out insurance for 100% of their position, or partial insurance for 75%, 50%, or 25% of their position.

Traders pay an insurance premium to get protected. All the insurance premium will be credited to a Mutual Insurance Fund, and all the Mutual Insurance payoffs come from the Mutual Insurance Fund. That’s why it’s called ‘Mutual Insurance’.

Bybit will inject 200 BTC as initial capital to launch the Mutual Insurance Fund.

Trade without the risk

Bybit’s Mutual Insurance is a good risk management tool if you foresee high volatility or when the market trend is unclear. If the market moves against your position, rest assured that you will be compensated.

Start using the Mutual Insurance feature now: https://www.bybit.com/app/exchange/BTCUSD

For more information on how to use Mutual Insurance,  visit:  https://help.bybit.com/hc/en-us/articles/900000389743-Introduction-to-Mutual-Insurance