The first Bitcoin mining derivatives product has been launched on a regulated US exchange.
Luxor Technology and Bitnomial launched the first fully regulated Bitcoin mining derivatives product in the United States on May 28.
The new product, called Bitcoin Hashrate Futures, aims to increase liquidity and transparency while reducing counterparty risk for market participants.
Hashrate Futures, traded under the ticker $HUP, allow miners to hedge their returns and provide investors with a new way to access the Bitcoin mining market.
Each contract represents 1 Petahash (PH) and has a monthly period. The consensus uses Luxor’s Bitcoin Hash Price Index, which tracks the value of the hash rate, the digital commodity at the heart of the contract.
Matt Williams, head of derivatives at Luxor, said:
“Hashrate futures are the pinnacle of Bitcoin mining hedging products. “As the first fully regulated Bitcoin mining derivative, this contract will usher in a new era of more transparent, secure and liquid hashrate trading.”
Luxor and Bitnomial have designed their products with accessibility in mind, allowing anyone with a Futures Commission Merchant (FCM) account connected to the Bitnomial exchange to trade their products.
Luxor has also established an Introducing Brokerage (IB) business to help companies participate in these FCMs. Hashrate futures complement Luxor’s suite of hashrate financial products, including hashrate transfers that may or may not be physically delivered.
Bitnomial founder and CEO Luke Hoersten said:
“The mining community has seen unprecedented demand for Luxor’s spot and forward products and fungible futures products. Hashrate futures provide Bitcoin miners and institutional investors with a new hedging method, meeting the growing demand for cryptocurrency-based derivatives.”
Bitnomial’s unique position in the Bitcoin derivatives market is that it offers physically backed contracts, allowing traders to redeem those contracts in Bitcoin instead of fiat.
According to exchange data, Bitnomial Bitcoin futures trading volume and open interest reached record highs in the first quarter of 2024, reflecting growing interest in physically-backed Bitcoin financial products.
The addition of Hashrate Futures enhances Bitnomial’s comprehensive Bitcoin derivatives complex, which includes Bitcoin futures, options, Deci futures, and now hashrate futures. The complex offers a variety of tools to manage risk and invest in the Bitcoin market.
