I structured a hedge as insurance if there is a significant price correction

TL;DR: I built a long-dated, laddered put option hedge using IBIT. This is not because I expect a crash, but so I have capital ready to stack sats if we see a major price correction.

I hold BTC as a long-term position. It is a meaningful one. It represents wealth I hope to retire on within the next 10 years.

I am not looking to trade out of it. However, given the size of the position for me, I wanted a way to protect against an outcome I do not expect but also cannot ignore. Another deep drawdown, as has happened in every prior cycle after an ATH.

1. The Structure

I used long-dated put options on IBIT, the iShares Bitcoin Trust ETF, expiring in January 2026. The position is unleveraged, fully funded, and risk-capped. It is designed purely as insurance.

The total cost of the hedge was approximately 5 percent of the value of my BTC holdings at the time I entered the position.

IBIT roughly tracks the BTC price at a scale of about 1 IBIT share equals BTC divided by 1,750. However, the options are priced independently based on both the underlying IBIT price and implied volatility. This means the trigger levels below do not correspond to specific BTC prices. They are based on what the market is pricing in at the time.

1. The Execution (Laddered Auto-Exit Plan)

The puts are paired with Limit-If-Touched (LIT) sell orders that trigger automatically if the option value rises into conviction-weighted exit zones.

Here is the ladder: • If IBIT puts rise into the $10 to $15 range, I will exit approximately 25 percent of the hedge. • If puts reach $15 to $25, I will exit another 50 percent. • If puts exceed $25, I will exit the final 25 percent.

These prices are based on the expected value of the puts at different levels of IBIT decline and volatility expansion. If none of these levels are hit, the hedge expires worthless. That would mean the market held up better than expected.

1. Why This

I am not trying to time tops or predict a crash. I just want to have a plan in place if BTC follows past cycle patterns. Implied volatility is currently low, which makes long-dated puts unusually affordable.

If the hedge expires worthless, I lose a known cost. If we get a major correction, I will have ready capital to reaccumulate when others may be forced to sell.

This is my first time building a structured hedge on BTC. I hope I never need it. But I would rather have it and not use it than wish I had it when it is too late.

I would welcome thoughts or feedback from others who have done similar things with BTC options.