Luxor and Bitnomial Launch Hashrate Futures, a New Bitcoin Mining Derivative Product
Summary:
Luxor Technology Corporation and Bitnomial Inc. have introduced a Bitcoin mining derivative product, Hashrate Futures, on Bitnomial's U.S. derivatives exchange. The product allows miners to stabilize their income and gives investors a chance to venture into the Bitcoin mining hash rate. The Hashrate Futures contracts are sized at 1 petahash (PH) per month and use Luxor's Bitcoin Hashprice Index for settlement. Hashprice, a concept introduced by Luxor, shows miners' potential daily earnings from a specific amount of hash rate. The current hashprice stands at $0.053 per terahash per second per day.
In a collaborative effort, Bitcoin mining company Luxor Technology Corporation and Bitnomial Inc. have introduced a derivative product related to Bitcoin mining on Bitnomial's U.S. derivatives exchange platform. Bitnomial unveiled Hashrate Futures on May 28. This futures contract derivative allows for the trading of the computational power of the Bitcoin blockchain. Bitnomial signifies that the product, listed as HUP, provides miners with a method to secure their revenue while also giving investors the opportunity to venture into the Bitcoin mining hash rate. A futures contract is a form of financial derivative in which two entities consent to trade a financial commodity at a predetermined price on a specified future date. This product allows for hash rate trading — the computational strength of Bitcoin — and its pricing is based on a concept called "hashprice," which is Luxor's gauge of potential Bitcoin mining income. The Hashrate Futures contracts have a monthly duration and are 1 petahash (PH) in size, with the reference rate for settling it being Luxor's Bitcoin Hashprice Index. Luxor also provides Hashrate Forwards that are non-deliverable and are settled off the exchange under Commodity Futures Trading Commission regulations. Luke Hoersten, Bitnomial's founder and CEO, points out that Hashrate Futures correlate with the company's tangible Bitcoin Futures, facilitating "Hashrate to Bitcoin Futures spreads." According to him, these spreads let participants obtain returns either in USD or BTC, or just isolate hash rate risk from Bitcoin price risk. Luxor introduced the term "hashprice," which represents the anticipated value on a daily basis for 1 TH/s of hashing power. It essentially measures the earnings a miner can expect from a certain amount of hash rate. Presently, the hashprice stands at $0.053 per terahash per second per day as stated by HashRateIndex. Around April 20, the halving event prompted a rise to $0.140, but it plunged subsequently once block rewards were halved. Since the start of 2024, hashprice has decreased by 46%, imposing greater challenges for miners to make a profit from their proof-of-work activities.
Published At
5/29/2024 6:45:30 AM
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