What to know:
- Nakamoto is using Bitcoin derivatives to generate steady income while reducing downside risk.
- The strategy combines earning from volatility with protective hedging to stabilize returns.
Nakamoto Inc. is introducing out a new strategy to make money from Bitcoin’s price swings. The company has launched an actively managed Bitcoin derivatives program. It is designed to generate steady income while also protecting against price drops in Bitcoin
The program has been running since early 2026 and works alongside Nakamoto’s long-term plan of holding Bitcoin. Instead of just holding the asset, the company is now using financial tools to earn extra returns and reduce risk.
Source: businesswire
To do this, the company partnered with Bitwise Asset Management, which manages the strategy, and Kraken, which provides custody and trading infrastructure. Typically, Bitcoin is known for its high volatility, and Nakamoto wants to turn that volatility into income while he limits investors losses during downturns.
How Nakamoto Wants to Run its Strategy
The first part focuses on income. Nakamoto sells options like covered calls and call spreads on a portion of its Bitcoin holdings. This allows the company to earn regular premium income from market activity.
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The second part focuses on protection. Nakamoto buys protective puts and similar instruments to reduce losses if Bitcoin’s price falls sharply. In some cases, the income earned from the first strategy helps pay for this protection.
The company says this balanced approach allows it to earn money while still holding onto its Bitcoin. The assets used as collateral remain part of its total holdings. At the same time, the strategy is carefully controlled. There are limits on how much exposure the company can take, which markets it can trade in, and how risk is managed.
Nakamoto believes Bitcoin volatility is often mispriced and sees an opportunity to profit from it. By actively managing derivatives, the company aims to create a new stream of income for shareholders. However, the strategy is not without risks. Market volatility, liquidity issues, and counterparty risks could affect performance.
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