Bitnomial and Luxor Roll Out a Bitcoin Mining Derivatives Product

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Luxor Technology Corporation and Bitnomial Inc. have teamed up to launch a new Bitcoin mining derivative product on Bitnomial’s United States derivatives exchange.

The product, called Hashrate Futures, was announced on May 28 and allows for the trading of the computing power of the Bitcoin blockchain. It is denoted by the ticker HUP and serves as a valuable tool for miners to hedge their revenue and for investors to gain exposure to the Bitcoin mining hash rate.

This type of product is known as a futures contract, which is a financial derivative that involves two parties agreeing to buy and sell a financial asset at an agreed-upon price at a future date.

In this case, the Hashrate Futures contracts are priced according to “hashprice,” which is Luxor’s measure of Bitcoin mining revenue potential.

These contracts have a size of 1 petahash (PH) for monthly durations and use Luxor’s Bitcoin Hashprice Index as the reference rate for settlement. Luxor also offers non-deliverable Hashrate Forwards, which are over-the-counter products that do not settle on an exchange regulated by the Commodity Futures Trading Commission.