Luxor and Bitnomial launch first Bitcoin mining derivative in the US

Bitcoin Hashrate Futures, the first fully regulated Bitcoin mining derivative product has been launched for trading in the US by Luxor Technology Corporation and Bitnomial. The product will trade under the $HUP ticker with featuring 1 petahash (PH) contract sizes through monthly durations.

The derivative product is designed to increase liquidity and transparency in the Bitcoin mining sector and its ancillaries while also reducing counterparty risk for participants. The product will enable miners to hedge revenue and provide investors with a new line of access to Bitcoin mining as a market.

Settlement will be executed using Luxor’s Bitcoin Hashprice Index , tracking the value of hashrate across competing miners. Current data from the index shows that the Hashprice is at $52.7, computed as spot USD per petahash over a daily average.

Luxor and Bitnomial have designed the product to be accessible to anyone with a Futures Commission Merchant (FCM) account connected to the Bitnomial exchange. Luxor has also established an Introducing Broker (IB) business to help firms onboard more FCMs, making it easier for interested parties to participate in the new derivative product.

The launch of Bitcoin Hashrate Futures complements Luxor’s existing suite of hashrate financial products, which includes physically delivered and non-deliverable Hashrate Forwards.

Luke Hoersten, founder and CEO of Bitnomial, highlighted the growing demand for crypto-based derivatives products, particularly from the mining community. Hoersten claims that there has been “unprecedented demand” for a futures product that’s fungible with Luxor’s spot and forwards offerings.

Bitnomial’s leverage in the Bitcoin derivatives market plays in with how offers physically-backed contracts, enabling traders to redeem these for Bitcoin in place of fiat. With Bitcoin Hashrate Futures’ entry to regulated markets, there will be more diverse tools to respond to the complexities of Bitcoin derivatives.