Bumper has something for everyone, and there’s a few different strategies which you could employ to benefit from our unique crypto price protection.
Here, we’d like a present just a few different scenarios and use cases to protect your crypto from those nasty red-days (or even weeks or months), which do tend to have a bit of a bad habit of occurring somewhat frequently.
Everyone wants to time the bottom of a dip to buy, but it’s impossible to tell whether your newly purchased crypto will bounce off support, or crash straight through it and continue heading south.
If you think you’ve found the bottom, but you’re not sure (and really, you can never totally be sure), then Bumper is the answer.
If you happen to be bang on right, and your token does indeed take off, all well and good, you can sit back and enjoy the ride, and the higher it gets, the more your premium is likely to be super-cost efficient compared to buying a Put Option.
When you’re reaching a bottom, you typically have some historical data which indicates where the regions of support and resistance are. But when you’re in new all-time-high territory, there’s absolutely no telling where the top is or how much further it’s got to push.
This is where Bumper is an invaluable tool for traders. Nobody wants to be that guy who held through and past the top, and ended up holding the bag after everyone else sold out!
By using Bumper when you’re approaching ATH (All Time High) territory, you’re basically locking in profits should a correction occur - and even if it’s followed by a continuation upwards, you aren’t going to miss out on further gains, as you would if you’d already taken profit or used a trailing stop.
If your strategy is to HODL, where you don’t ever expect to sell until you’ve well and truly landed on the moon, then Bumper is great for you.
For those patient types with a long-term projection, simply buying with the intention of holding for years is a good strategy based on the past history of the top crypto’s.
The downside of course is that downtrends happen, and during these Bear cycles, your portfolio isn’t growing during that time.
This can be psychologically devastating for more risk-averse individuals, but our diamond-handed HODLer has nerves of steel and can ride out the dips in a zen-like way.
But with Bumper, even the down-days/weeks/months are okay. By setting short-term protection (30 days) you can increase your position (or make a nice little bit of yield by pocketing the difference) if the price does actually go down below your floor. Then, simply start your protection again. Either way, Bumper provides a simple to use way to make sure your diamond-hands stay strong.
One of the cool features which will be built into the protocol is the 'Bumpered' Asset, which essentially represents your protected crypto, but with the volatility below your floor price removed.
If you’re planning on taking out a DeFi loan, it makes sense to Bumper your collateral first, and put up your Bumpered asset as collateral. This effectively provides you with a way of mitigating against liquidation should the market bomb, because your Bumpered asset always has a minimum floor value. Of course, you’ve to take premium into account, but still, it’s still a very valuable way to protect yourself from forced closure.
Following on from the above strategy, you could of course borrow stablecoins by using your Bumpered asset as collateral… and then play the other side of the market by depositing your newly acquired stablecoins into Bumper, thus earning a yield too!
Totally Genius, it’s almost like cheating.
Everyone has to start somewhere in crypto, and if you remember back to your own early days, you’ll remember what a huge learning curve it could be.
There’s a natural risk-aversion for many first-time crypto-buyers, and a big problem for new players coming into the space is in figuring out how not to get Rekt in a market they generally don’t really understand all that well.
Bumper is the perfect play for the new kids on the blockchain. Protecting the value of your wallet when taking your first foray into cryptocurrencies is likely to be a game-changer for many crypto-newbies, allowing some peace of mind whilst learning more about the crypto-sphere.
Spare a thought for the kings of the crypto-ocean, the Whales.
If you were one of those either were lucky enough to have a ton of capital behind you to buy loads of tokens, or smart enough to get in early when the price was so low you could buy a large number for buttons, then Bumper is the perfect way to protect your highly prized pot.
Really, If you’d made millions from a small initial investment, wouldn’t you naturally want to have a simple way to hedge against protracted bear markets and flash crashes? Of course you would.
Because if you’re a whale say holding $1M worth of crypto today, even shedding a few percentage points daily is a colossal amount of money to watch evaporate on a day-to-day basis.
It requires nerves of steel when you see your portfolio shedding tens of thousands of dollars in a day. Fortunately, Bumper provides a lifeline to that highly intelligent and gentle species of Whale, smoothing out the most anxiety-causing dumps.
For those who like to make a modest, but regular, crypto purchase every time their salary lands, making Bumper a major part of your strategy to grow your holdings month by month is probably one of the smartest moves you can make.
Opening a new protection position each time you make your purchases has the net effect of turning your crypto holdings into a kind of savings vault.
For the most part, using Bumper as a tool for protecting your compounding crypto helps grow the value of your wallet either in terms of increasing dollar value (when the price goes up), or alternatively, increases the amount of sats you’re stacking if you exchange claimed stablecoins back into crypto again.
One of the interesting use cases for Bumper is for targeting a specific value at a discreet point in time in the future.
For example, imagine you had a freelancer doing a job for you, and they were expecting a payment on a set date in a few months' time, to be settled in a specific dollar amount of crypto.
Or perhaps you're purchasing a shiny new Lamborghini in crypto, but it's going to take a while before it's ready for delivery, and the balance needs to be paid on a certain day some months from now.
You could simply Bumper your crypto for the entire time (or add to it in increments over time), knowing that you would be able to deliver their entire payment regardless of where the market went between now and the payment date.
This has the net effect of reducing having to buy more crypto assets from your own money if the market price of your crypto went down during the waiting period.
Of course, you’d have to take into account a bit of premium, but it’s an interesting way to create your own personalised futures strategy.
Finally, let’s not forget those companies that have a fiduciary responsibility to employ risk-reduction strategies on behalf of their clients whose money (and crypto) they have under management.
Typically, these companies use a range of tools to hedge risk in traditional markets, often engaging in buying and selling various different Options strategies (such as making covered calls, long puts, collars and put-spreads) as well as sometimes buying volatility, diversification and short-selling.
However, in the crypto world, there are still relatively few platforms with the liquidity and depth sufficient to satisfy the sort of volumes they are dealing with.
Thus Bumper may well be the answer (or at the very least, another useful option) for these institutional and family offices that have a requirement for hedging against volatility, and especially so those who are conscious of maximising price efficiency.
There’s no question, hedging against crypto volatility has never been as easy, price efficient and provably fair as when you’re using Bumper.
Whichever strategy you might adopt, you’re going to need some BUMP tokens to open your position, but the beauty of BUMP is that all you need to do is buy and hold, and bond tokens when the time is right to take our protection or earn a yield on your stablecoins. Yes, you heard that right — you don’t spend your BUMP tokens when you open a position with Bumper!
Are you keen to know more about how Bumper is radically re-imagining the world of crypto hedging? Well, we recommend you follow us on social media, and join in with the conversation from the community on Discord.
Disclaimer:
Any information provided on this website/publication is for general information purposes only, and does not constitute investment advice, financial advice, trading advice, recommendations, or any form of solicitation. No reliance can be placed on any information, content, or material stated on this website/publication. Accordingly, you must verify all information independently before utilising the Bumper protocol, and all decisions based on any information are your sole responsibility, and we shall have no liability for such decisions. Conduct your own due diligence and consult your financial advisor before making any investment decisions. Visit our website for full terms and conditions.
