In a groundbreaking collaboration, Luxor Technology Corporation and Bitnomial Inc. have introduced an innovative Bitcoin mining derivative on Bitnomial’s U.S. derivatives platform.
Luxor and Bitnomial Bitcoin Mining
On May 28, Bitnomial heralded the debut of Hashrate Futures, a novel futures contract tailored for trading the computational horsepower of the Bitcoin blockchain.
Under the ticker HUP, this product offers miners a mechanism to safeguard their revenues, while investors gain a novel avenue to engage with Bitcoin mining hash rate dynamics.
A futures contract, fundamentally, is a financial instrument wherein two entities agree to transact a financial asset at a predetermined future date and price.
This particular product deals in hash rate—the computational strength of Bitcoin—and is valued based on “hashprice,” Luxor’s proprietary metric assessing Bitcoin mining revenue potential.
Hashrate Futures contracts come in 1 petahash (PH) increments for monthly terms, with the Luxor Bitcoin Hashprice Index serving as the settlement reference rate.
In addition to this, Luxor provides non-deliverable Hashrate Forwards, traded over-the-counter and not settled on a Commodity Futures Trading Commission-regulated exchange.
Bitnomial’s founder and CEO, Luke Hoersten, elucidated that Hashrate Futures are fungible with their physical Bitcoin Futures, “facilitating Hashrate to Bitcoin Futures spreads.”
“These spreads enable participants to realize returns in either USD or BTC, or to separate hash rate risk from Bitcoin price risk,” he articulated.
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Hashprice, a term pioneered by Luxor, denotes the anticipated value of 1 TH/s of hashing power per day. It provides an estimate of a miner’s earnings from a given quantity of hash rate.
Presently, the hashprice stands at $0.053 per terahash per second per day, according to HashRateIndex.
This value surged around the halving event on April 20, peaking at $0.140, but subsequently declined as block rewards were halved.
Since the onset of 2024, the hashprice has plummeted 46%, exacerbating the profitability challenges for miners engaged in proof-of-work activities.