Bitcoin mining company Luxor Technology Corporation and derivatives exchange Bitnomial Inc. have collaborated to introduce a new derivative product on Bitnomial’s US derivatives exchange. The product, called Hashrate Futures, is a futures contract that allows traders to speculate on the computing power of the Bitcoin blockchain. By trading under the ticker HUP, the product provides miners with a way to hedge their revenue and investors with exposure to the Bitcoin mining hash rate. Hashrate Futures contracts are priced based on Luxor’s hashprice, which is a measure of Bitcoin mining revenue potential. These contracts have a size of 1 petahash (PH) and use Luxor’s Bitcoin Hashprice Index as the reference rate for settlement. Additionally, Luxor offers non-deliverable Hashrate Forwards which are over-the-counter products not regulated by the Commodity Futures Trading Commission. Bitnomial founder and CEO Luke Hoersten explained that Hashrate Futures can be combined with the company’s physical Bitcoin Futures, allowing participants to manage hash rate risk separately from Bitcoin price risk. The hashprice, which represents the expected value of 1 TH/s of hashing power per day, currently stands at $0.053 per terahash per second per day, according to HashRateIndex. This figure experienced a spike to $0.140 around the halving event on April 20 but has since declined due to the reduction of block rewards. Overall, the hashprice has decreased by 46% since the beginning of 2020, making it more challenging for miners to generate profits from their proof-of-work activities.
Bitcoin mining derivatives product launched by Luxor and Bitnomial