1\\ Some people fail to see how hedging downside risk can be a good thing for investors to consider. During my career I have seen pension funds that did fairly well during turmoil in financial markets, and also those who got slaughtered.

2\\ It starts with awareness of the risk of your positions and your risk appetite. How do you value losses vs gains and how important is capital preservation to you?

Answers to these questions are very personal, so generalised statements about hedging risk are very shortsighted.

3\\ Remember how interest rates came down the last years? Pension funds on average see their liabilities increase with 25% for every 1% drop in interest rates. Those who were hedged now have much better funding ratios than those were not.

4\\ Worst case scenario for a pension fund is the collapse in both rates and equity at the same time. In that case funds take a hit at both the asset and the liability side. Smart fund managers are aware of these risks and hedge them as well.

5\\ Your question whether or not to hedge should start with the question how well you are able to handle shocks in the market, and to what extent you are able to handle them.

This holds for everyone. Institutional and retail investors.

6\\ Next time when someone tells you that hedging is a waste of capital, think back of this thread and realise that the person who tells you so, is more likely chasing clout than sharing knowledge or wisdom.

7\\ If you need help with crafting your own dynamic hedging strategy, please be aware that I have years of experience with serving institutional investors and that I'm currently using this experience to help larger #ethereum and #bitcoin holders to design customised strategies.