DeFi sector's weakness might just make it the ultimate Bitcoin hedge

The DeFi sector has been caught in the throes of a relentless selloff over the past two months, with bulls unable to gain any traction as many of the tokens sink against USD and Bitcoin.

Bitcoin's intense strength has made this selloff quite surprising, as many investors previously speculated that strength amongst the major digital assets would lead traders to allocate more capital to "High beta" assets - like those residing in the DeFi market.

This has led one legendary crypto trader to note that shorting major DeFi altcoins could be the best way to hedge against any potential BTC downside in the near-term.

DeFi sector continues crashing despite Bitcoin's strength.

Tokens within the DeFi sector have been struggling to gain any momentum throughout the past couple of months, with the entire sector cratering in the time following its peak in early-September.

Finance's YFI token - a darling of the DeFi space and widely viewed as a benchmark indicator - dipped below $10,000 for the first time in months overnight.

Trader claims shorting DeFi could be the ideal BTC hedge.

For traders long on Bitcoin looking to hedge against downside, one legendary pseudonymous crypto trader believes that shorting DeFi altcoins could be the best play.

While on a recent podcast with Luke Martin, the trader known as Flood explained that besides limited liquidity and potentially seeing random movements, they could be a great way to hedge against Bitcoin downside.

Unless there is some catalyst that causes investors to rotate capital out of Bitcoin and into altcoins, there's a solid chance that DeFi will continue underperforming.