The contracts, priced in petahash units and settled using Luxor’s Bitcoin Hashprice Index, offer traders exposure to Bitcoin mining hashrate.
A press release states that Luxor Technology Corporation (Luxor) and Bitnomial, Inc. have jointly introduced the initial exchange-traded Hashrate Futures in the United States.
These futures contracts, which are slated to make their debut on Bitnomial’s derivatives exchange by the end of this month, are designed to meet the needs of both institutional investors and Bitcoin miners.
Matt Williams, head of derivatives for Luxor, remarked, “Hashrate has one of the highest volatilities among significant commodities, and the April 2024 Bitcoin Halving will exacerbate this volatility.”
Bitcoin producers must implement supplementary strategies to alleviate this price risk and safeguard the sustainability of their enterprises.
They can rapidly enter and exit hedging positions to mitigate the risk associated with their revenue streams by utilizing exchange-traded hashrate futures.
Additionally, the certainty of revenue should enhance their credit standing with lenders, thereby reducing the cost of capital acquisition.
Hashrate Futures hopes to provide investors with access to a tradable derivative that tracks the Bitcoin mining hashrate in anticipation of the impending 2024 Bitcoin Halving while also providing miners with a tool to mitigate their future revenue streams.
The contracts, which have monthly durations and are priced in petahash (PH) units, will be settled using Luxor’s Bitcoin Hashprice Index. This will enable the contracts to monitor the value of the underlying commodity and hashrate efficiently.
Luxor’s Hashrate Futures: A Game-Changer for Miners and Investors
Hashrate Futures, the most recent addition to Luxor’s menu of hashrate financial instruments, is available to customers with Futures Commission Merchant (FCM) accounts linked to the Bitnomial exchange.
“As the Bitcoin halving approaches and the demand for spot Bitcoin ETFs surpasses the supply of Bitcoin mined, Bitnomial serves as a crucial link in the cryptocurrency ecosystem.”
As stated by Luke Hoersten, founder and CEO of Bitnomial. “Utilizing our tangibly delivered bitcoin futures and options and listed hashrate, miners are enabled to navigate this dynamic environment with ease.”
Bitnomial facilitates the efficient trading of futures spreads between hashrate and bitcoin, enabling miners to acquire bitcoin-denominated hashrate exposure.
This exposure is a valuable hedging mechanism and mined bitcoin is delivered directly to consumers through a federally regulated exchange.
The alignment of regulation and innovation in this context reinforces Bitnomial’s dedication to cultivating a resilient and inclusive cryptocurrency marketplace that welcomes all participants.
These physically supported contracts, a component of Bitnomial’s Bitcoin Product Complex, aim to offer market participants a one-of-a-kind opportunity, as indicated by record-breaking volumes and open interest in the fourth quarter of 2023.