Black Swan Protection refers to strategies designed to safeguard investments against unpredictable and extreme events that can significantly impact markets. These events, known as “black swan events,” are rare and often have devastating consequences, such as sudden crashes or regulatory changes.

In the cryptocurrency landscape, investors employ various methods for Black Swan Protection. For instance, they might diversify their portfolios, investing in multiple assets to reduce risk concentration.

They may also use derivatives like options and futures to hedge against potential losses. Another approach involves maintaining a portion of assets in stablecoins or cash, providing liquidity and stability during market turmoil.

Additionally, setting stop-loss orders allows investors to automatically sell assets if prices drop below a certain level, limiting potential losses. Overall, Black Swan Protection is about preparing for the unexpected, ensuring that an investment strategy can weather unforeseen challenges and minimize adverse impacts on an investor’s portfolio.