Luxor and Bitnomial introduce new product for Bitcoin mining derivatives

Luxor Technology Corporation and Bitnomial Inc. have collaborated to introduce a Bitcoin mining derivative product on Bitnomial’s derivatives exchange in the United States. The product, called Hashrate Futures, is a futures contract that allows users to trade the computing power of the Bitcoin blockchain. It provides miners with a means to hedge their revenue and enables investors to gain exposure to the Bitcoin mining hash rate. The futures contract is based on the hash rate, which is the computing power of Bitcoin, and is priced according to Luxor’s hashprice, a measure of Bitcoin mining revenue potential. The contract has a 1 petahash (PH) size for monthly durations and settles based on Luxor’s Bitcoin Hashprice Index. Luxor also offers non-deliverable Hashrate Forwards, which are over-the-counter products and do not settle on a regulated exchange. Bitnomial CEO Luke Hoersten explained that Hashrate Futures can be traded alongside the firm’s physical Bitcoin Futures, allowing participants to manage hash rate risk separately from Bitcoin price risk. The hashprice, which quantifies the expected value of hashing power per day, is currently at $0.053 per terahash per second per day, according to HashRateIndex. It experienced a spike to $0.140 around the halving event in April but has since declined due to the reduction in block rewards. The decreasing hashprice has made it more challenging for miners to generate profits from their proof-of-work activities.