0xSun: The current overall profit of the hedging strategy of going long on ETH and shorting altcoins is about 16%. Although the increase is not as much as ETH, the risk is lower.

According to Mars Finance, on August 13, Smart Money and crypto KOL 0xSun (@0xSunNFT) stated that on August 1, the price of Ethereum was approximately $3,700, and it has now risen to $4,660, an increase of 26%. The profits from shorting altcoins are concentrated in the range of 5% to 15%, with an overall profit margin of about 16%. Compared to holding Ethereum outright, the hedging strategy experiences less psychological pressure during downturns, especially since Ethereum once dropped to $3,360. Holding Ethereum outright may trigger stop-losses, while in a hedged position, the decline of altcoins is usually greater than that of Ethereum, still improving overall profits and providing a better holding experience. Previously reported on August 1, 0xSun indicated that there is currently a significant divergence between bullish and bearish sentiments in the market. Personally, they have opened a hedging trade (going long on ETH and shorting a basket of altcoins), with a position roughly at 1:1, believing that the institutional funds buying ETH will not spill over to other altcoins. If the market continues to rise in the second half of the year, it is believed that it will likely still be driven by ETH. If the market enters a bear phase, it is also thought that altcoins cannot stand alone, while ETH at least has institutional purchasing power to support it. The scenarios that could render this hedging strategy ineffective are either a true altcoin season where most altcoins consistently outperform ETH, or if ETH fluctuates or leads the decline while other altcoins do not drop much. Based on the experience of the past few months, I personally believe the likelihood of this is quite low.