Bitcoin mining software company Luxor Technology Corporation has launched “Hashrate Futures,” a bitcoin mining derivative product, on Bitnomial’s US-based derivatives exchange.
This financial product, developed through a partnership between Luxor and Bitnomial, is the first of its kind. According to its press release, the product advances Luxor’s goal of providing market participants with increased liquidity, greater market transparency, and lower counterparty risk.
The financial contracts are available to anyone with a Futures Commission Merchant (FCM) account that connects to the Bitnomial exchange. Luxor has also established an Introducing Broker (IB) business to assist firms with onboarding to these FCMs. Its Bitcoin Hashprice Index will serve as the reference rate for settlement, tracking the value of hashrate, the digital commodity underpinning the derivative contracts for the financial product.
Luxor’s Head of Derivatives, Matt Williams, stated,
“Hashrate Futures are the pinnacle of Bitcoin mining hedging products, one that Luxor first envisioned when we created the Hashprice Index in 2020. These contracts offer market participants the first fully-regulated Bitcoin mining derivative, ushering in a new era of hashrate trading that is more transparent, secure, and liquid.”
Luke Hoersten, Founder and CEO of Bitnomial, highlighted the unprecedented demand for a futures product that’s fungible with Luxor’s spot and forward offerings. He noted that Hashrate Futures provides bitcoin miners and institutional investors with a new hedging method as demand for new crypto-based derivatives products continues to grow.
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This Hashrate Futures offering expands Luxor’s suite of hashrate financial products and complements its existing physically delivered and non-deliverable Hashrate Forwards.
The offering also adds to Bitnomial’s Bitcoin Product Complex, which includes physical Bitcoin futures and options. Notably, Bitnomial offers physically backed contracts, allowing traders to redeem them for Bitcoin instead of fiat. Public data shows that Bitnomial Bitcoin Futures volumes and open interest reached all-time highs during Q1 of 2024, indicating growing interest in physically backed Bitcoin financial products.
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