Luxor Technology Corporation (Luxor) and Bitnomial, Inc. announced… announced the launch of the first Hashrate futures contracts traded on a US exchange, according to a press release sent to Bitcoin Magazine. Scheduled to debut on Bitnomial Derivatives Exchange by the end of this month, these futures contracts are specifically designed to meet the needs of Bitcoin miners and institutional investors alike.
“Hash technology has one of the highest volatility among major commodities, and the Bitcoin halving in April 2024 will exacerbate this volatility,” said Matt Williams, head of derivatives at Luxor. “Bitcoin miners need additional methods to mitigate this price risk to ensure the longevity of their businesses. Exchange-traded retail futures contracts will allow them to quickly move in and out of hedging positions to de-risk their revenue streams, and revenue assurance should improve their credit profile with lenders,” This will reduce the cost of securing capital.”
With the impending Bitcoin halving in 2024 in mind, Hashrate Futures aims to provide miners with a tool to hedge their future revenue streams while giving investors access to tradable derivatives to track the Bitcoin mining hash rate. The contracts, denominated in one petahash (PH) and with monthly periods, will reference the Bitcoin hash price index in Luxor for settlement, effectively tracking the value of the underlying commodity, i.e. the hash rate.
Hashrate Futures is accessible to those with trading accounts on the Futures Commission (FCM) linked to the Bitnomial exchange, and is the latest addition to Luxor's suite of Hashrate financial products.
“As we inch closer to the Bitcoin halving and see unprecedented demand for spot Bitcoin ETFs exceeding available mined supply, Bitnomial stands as a pivotal bridge in the cryptocurrency ecosystem,” said Luke Horsten, Founder and CEO of Bitnomial. Bitcoin futures and options enable miners to navigate this evolving landscape seamlessly. Through Bitnomial, miners can efficiently trade Bitcoin futures retail spreads, obtain an invaluable hash supply denominated in Bitcoin with efficient hedging and deliver the mined Bitcoin directly to consumers. Via a federally regulated exchange. “The convergence of innovation and regulation reinforces Bitnomial’s commitment to fostering a robust and accessible market for all cryptocurrency participants.”
As part of Bitnomial's Bitcoin product complex, these physically backed contracts aim to provide a unique opportunity for market participants, with growing interest evidenced by record high volumes and open interest during Q4 2023.
