Keeping 1 BTC without riding the drawdown: the 1x inverse short hedge BloFin Academy walks through

Say you hold 1 BTC, you don't want to sell it, and you also don't want to watch it lose a third of its value over the next month. BloFin Academy has a guide for exactly that spot: hedging the coin with a short on an inverse (coin-margined) perpetual, so your dollar value stays put while you keep the BTC.

The image is the official cover art from that BloFin guide, two stacked books with 101 on the top cover. No prices or account data in it.

How inverse contracts are sized

BloFin lists 14 coin-margined pairs. Each contract is worth 1 USD, and the minimum order is 1 contract. Margin and PnL are paid in the coin itself, not in USDT. That is the whole reason this hedge works so cleanly: the short pays you in BTC when BTC falls.

The setup in the guide

• You hold 1 BTC, price $60,000
• You short 60,000 BTCUSD contracts (60,000 x $1) at 1x, isolated margin, using that 1 BTC as margin
• Short PnL in BTC = 60,000 x (1 / exit price - 1 / 60,000)

What the account is worth at different prices

• $30,000: short is +1 BTC, you hold 2 BTC, worth $60,000
• $48,000: short is +0.25 BTC, you hold 1.25 BTC, worth $60,000
• $60,000: short is flat, 1 BTC, worth $60,000
• $72,000: short is -0.1667 BTC, you hold 0.8333 BTC, worth $60,000
• $120,000: short is -0.5 BTC, you hold 0.5 BTC, worth $60,000

The dollar value stays fixed. What moves is how many coins you have. That is the trade-off: you give up the upside in dollar terms to buy protection on the downside.

Why 1x matters

At 1x the guide says there is effectively no liquidation price, funding aside, because the coin you post as margin rises in value exactly as the short loses. Push it to 2x (120,000 contracts on the same 1 BTC) and the guide puts liquidation near $119,520, using the 0.4% maintenance margin rate it read on Sept 16. At that point it's no longer a hedge, it's a bigger bet against your own coin.

The half hedge

Short 30,000 contracts instead and you only cover half. The guide's numbers: about $54,000 at $48k and about $66,000 at $72k. You keep some upside and some downside.

Funding cuts both ways

BloFin settles funding every 8 hours, starting at midnight Hong Kong time. The guide's snapshot was 0.015% per interval on Sept 16, capped at 2%. On this position that's about 0.00015 BTC per interval, roughly 0.0032 BTC a week (around $190 at the time), and shorts receive it while funding is positive. When funding turns negative, you pay instead, and that slowly eats into the hedge.

Getting out

Close with a reduce-only buy for the same contract count, so an exit can't accidentally flip you long. You can also add contracts later if you want more cover.

When USDT-margined is the better tool

The guide is clear that inverse isn't always the answer. If you already hold stablecoins, if you only want a partial hedge in dollar terms, or if the coin you hold has no inverse contract, a USDT-M short is simpler. ETHUSD and SOLUSD inverse contracts do exist if you hold those.