First-ever Bitcoin mining derivative product goes live on a regulated US exchange

Luxor Technology and Bitnomial launched the first fully regulated Bitcoin mining derivative product for trading in the US on May 28.

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

Hashrate Futures, trading under the ticker $HUP, allow miners to hedge their revenue and give investors a new way to access the Bitcoin mining market.

Each contract represents 1 petahash (PH) and has a monthly duration. Settlement uses Luxor’s Bitcoin Hashprice Index, which tracks the value of hashrate, a digital commodity central to the contracts.

Luxor’s Head of Derivatives Matt Williams said:

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

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

Luxor also established an Introducing Broker (IB) business to help firms onboard to these FCMs. Hashrate Futures complement Luxor’s suite of hashrate financial products, including physically delivered and non-deliverable Hashrate Forwards.

Bitnomial founder and CEO Luke Hoersten said:

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

Bitnomial’s unique position in the Bitcoin derivatives market offers physically-backed contracts, allowing traders to redeem them for Bitcoin instead of fiat.

Exchange data indicates that Bitnomial Bitcoin Futures volumes and open interest hit all-time highs in the first quarter of 2024, reflecting 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. This complex offers diverse tools for managing risk and investing in the Bitcoin market.

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