According to CoinDesk, Luxor Technology, a bitcoin mining software and services company, has partnered with crypto derivatives firm Bitnomial to launch the United States' first-ever exchange-traded hashrate futures. The product aims to help miners hedge their revenue risk ahead of April's halving event. The futures contracts will be cash-settled and based on hashprice, a term coined by Luxor that refers to the bitcoin mining revenue miners earn from a unit of hashrate over a specific period of time.
The contracts will be settled on an exchange instead of over-the-counter (OTC), providing more liquidity, transparency, and less counterparty risks for buyers and sellers. With the upcoming bitcoin halving event, which will cut rewards by half, miners are adding more mining computers, increasing the network's hashrate and creating added uncertainty for their revenue. Luxor's new financial product will have a contract size of one petahash (PH), monthly durations, and will be benchmarked to Luxor's Bitcoin Hashprice Index for settlement.
Bitnomial received approval from the Commodity Futures Trading Commission (CFTC) last year to register as a derivatives clearing organization in the U.S., allowing it to settle margined futures and options contracts. The new financial product will be part of Luxor's other hashrate-related products and a key addition to Bitnomial's Bitcoin Product Complex. As the industry faces challenges such as large bankruptcies and dried-up capital markets, miners will need to adopt sound treasury management strategies, including hedging through derivatives products, to ensure the longevity of their businesses and attract investors.
