Bitnomial emphasizes that Hashrate Futures, which will be traded under the HUP symbol, offers two important benefits. The first of these is that it allows miners to protect their income. The second benefit is that it provides investors with direct exposure to the hash rate of Bitcoin mining.

So, how does it work? Futures contracts are a type of financial derivative frequently used in the financial world. In these contracts, two parties commit to buy or sell a specific financial asset at an agreed price in the future. Unlike traditional futures contracts, Hashrate Futures is based on the hash rate, which is the processing power of Bitcoin. Pricing is carried out according to the “hashprice” index developed by Luxor. Hashprice is defined as an indicator that measures the potential income that can be obtained from Bitcoin mining.

Hashrate Futures contracts have a size of 1 petahash (PH) and are traded on a monthly basis. Luxor’s Bitcoin Hashprice Index is used as the reference price of the contracts. This index gives the market a general idea about the profitability of Bitcoin mining.

Apart from Hashrate Futures, Luxor also offers other derivative products that are traded over-the-counter (OTC). These are called non-deliverable Hashrate Forwards and are not traded on exchanges regulated by the CFTC (Commodity Futures Trading Commission).

Bitnomial founder and CEO Luke Hoersten states that one of the most important innovations offered by Hashrate Futures is that it is “interchangeable” with traditional Bitcoin Futures. In this way, investors can isolate the risk between the hash rate and Bitcoin price by creating “Hashrate-Bitcoin Futures spreads”. Hoersten states that these spreads offer investors the opportunity to make profits in both US dollars (USD) and Bitcoin (BTC) or to separate hash rate risk from Bitcoin price risk.

This new product is expected to have significant impacts on the Bitcoin mining industry. Hashrate Futures, which was launched in May 2024, can bring a breath of fresh air to miners who have had a hard time lately. As it is known, the reward for Bitcoin mining is halved every four years. This halving event last occurred in April 2024 and significantly reduced the income of miners. Hashrate Futures can help miners get through these challenging times by providing risk management tools to protect their revenue.

On the other hand, Hashrate Futures also creates new opportunities for investors. Compared to traditional Bitcoin investments, it is possible to invest directly in Bitcoin mining hash rate with Hashrate Futures. In this way, investors can potentially benefit from the profitability of Bitcoin mining regardless of Bitcoin’s price movements.

Hashprice is a term coined by Luxor and is used to measure the profitability of Bitcoin mining. Expressing the expected daily value of 1 TH/s (terahash/second) hash power, hashprice measures how much profit miners can expect to make from a certain amount of hash rate. According to HashRateIndex data, the current hashprice is around $0.053 per terahash per second per day. This value had risen to $0.140 per terahash per second per day before the halving event in April 2024. However, after the block rewards were halved, the hash price dropped significantly. The 46% decline since the beginning of 2024 makes it difficult for Bitcoin miners to profit from proof-of-work activities.

The launch of Hashrate Futures could be the beginning of a new era in the Bitcoin mining industry. This innovative product has the potential to contribute to the further development and maturation of the industry by offering new opportunities to both miners and investors.