Luxor Technology and Bitnomial Launched the First Fully Regulated Bitcoin Mining Derivative Product for Trading in the US

The new product — dubbed Bitcoin Hashrate Futures — aims to increase liquidity and transparency while reducing counterparty risk for market participants.

Bitcoin mining company Luxor Technology and digital commodities exchange Bitnomial have launched the first fully regulated Bitcoin mining derivative product for trading in the US.

The new product, called Bitcoin Hashrate Futures, aims to increase liquidity and transparency while reducing counterparty risk for market participants.

Hashrate Futures, trading under the ticker $HUP, enable miners to hedge their revenue and provide investors with a new avenue to access the Bitcoin mining market.

Each contract represents 1 petahash (PH) and has a monthly duration. Settlement is based on Luxor’s Bitcoin Hashprice Index, which tracks the value of hashrate, a key digital commodity in the contracts.

Luxor’s Head of Derivatives Matt Williams commented:

“Hashrate Futures are the culmination of Bitcoin mining hedging products. These contracts, being the first fully regulated Bitcoin mining derivative, will usher in a new age of hashrate trading that is more transparent, secure, and liquid.”

Luxor and Bitnomial designed the product for accessibility, enabling anyone with a Futures Commission Merchant (FCM) account connected to the Bitnomial exchange to trade the product.

Additionally, Luxor has established an Introducing Broker (IB) business to assist firms in onboarding to these FCMs. Hashrate Futures complement Luxor’s suite of hashrate financial products, which includes physically delivered and non-deliverable Hashrate Forwards.

Bitnomial founder and CEO Luke Hoersten stated:

“The mining community has shown an overwhelming demand for a futures product that is fungible with Luxor’s spot and forwards offerings. Hashrate Futures provide a new hedging method for Bitcoin miners and institutional investors, catering to the growing appetite for crypto-based derivatives.”

notably, Bitnomial's unique standing in the Bitcoin derivatives market offers physically-backed contracts, allowing traders to redeem them for Bitcoin rather than fiat.

According to the exchange's data, Bitnomial Bitcoin Futures volumes and open interest reached all-time highs in Q1 2024, highlighting the 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, providing diverse tools for managing risk and investing in the Bitcoin market.

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Assad Jafri

AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.

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