Luxor and Bitnomial Launch First Regulated Bitcoin Mining Derivative

Bitcoin Mining

Luxor Technology Corporation, a company specializing in Bitcoin mining software, has introduced “Hashrate Futures” on Bitnomial’s derivatives exchange in the United States.

This new financial product, developed in collaboration between Luxor and Bitnomial, marks a significant milestone as the first of its kind. The launch aims to enhance liquidity, improve market transparency, and reduce counterparty risk for participants, as stated in their press release.

Luxor Launches Hashrate Futures on Bitnomial Exchange

Luxor Technology Corporation has introduced “Hashrate Futures” on Bitnomial’s derivatives exchange in the United States. These financial contracts are accessible to anyone with a Futures Commission Merchant (FCM) account linked to Bitnomial. Luxor has also established an Introducing Broker (IB) business to facilitate firms in connecting to these FCMs.

The Bitcoin Hashprice Index, developed by Luxor, will serve as the reference rate for settlement. This index tracks the value of hashrate, which forms the basis of the derivative contracts for this innovative financial product.

According to Matt Williams, Luxor’s Head of Derivatives, “Hashrate Futures are the culmination of Bitcoin mining hedging products, originally envisioned when we created the Hashprice Index in 2020. These contracts represent the first fully-regulated Bitcoin mining derivative, ushering in a new era of hashrate trading characterized by increased transparency, security, and liquidity.”

Bitnomial and Luxor Expand Bitcoin Derivatives with Hashrate Futures

Luke Hoersten, Founder and CEO of Bitnomial, emphasized the significant demand for a futures product that integrates seamlessly with Luxor’s spot and forward offerings. Hashrate Futures, according to Hoersten, provides bitcoin miners and institutional investors with a novel hedging tool amid increasing interest in new crypto-based derivatives.

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Luxor’s introduction of Hashrate Futures expands its range of financial products related to hashrate, complementing its existing lineup of physically delivered and non-deliverable Hashrate Forwards.

Furthermore, this initiative enhances Bitnomial’s Bitcoin Product Complex, which includes physically backed Bitcoin futures and options. Bitnomial’s provision of physically backed contracts allows traders the option to redeem them for Bitcoin rather than fiat currency. Publicly available data indicates that Bitnomial’s Bitcoin Futures volumes and open interest hit record levels in the first quarter of 2024, underscoring growing enthusiasm for physically settled Bitcoin financial instruments.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.


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