Luxor Technology and Bitnomial have unveiled the inaugural fully regulated Bitcoin mining derivative product for trading in the US on May 28.

The fresh offering, known as Bitcoin Hashrate Futures, aims to enhance liquidity and transparency while mitigating counterparty risk for market participants.

Trading under the symbol $HUP, Hashrate Futures enable miners to hedge their revenue and provide investors with a novel entry into the Bitcoin mining sector.

Each contract, representing 1 petahash (PH), spans one month. Settlement relies on Luxor’s Bitcoin Hashprice Index, which monitors the value of hashrate, a key digital commodity integral to the contracts.

According to Luxor’s Head of Derivatives Matt Williams, Hashrate Futures represent the apex of Bitcoin mining hedging tools, promising a new era of hashrate trading marked by increased transparency, security, and liquidity.

Designed for accessibility, the product allows anyone with a Futures Commission Merchant (FCM) account linked to the Bitnomial exchange to engage in trading. Luxor has also initiated an Introducing Broker (IB) business to facilitate firms' onboarding to these FCMs.

Bitnomial founder and CEO Luke Hoersten noted the unprecedented demand within the mining community for a futures product compatible with Luxor’s spot and forwards offerings. Hashrate Futures, he believes, furnish a fresh hedging avenue for Bitcoin miners and institutional investors, meeting the escalating demand for crypto-based derivatives.

Bitnomial stands out in the Bitcoin derivatives arena by offering physically-backed contracts, permitting traders to redeem them for Bitcoin rather than fiat currency.

Exchange data indicates that Bitnomial Bitcoin Futures volumes and open interest soared to all-time highs in the first quarter of 2024, underscoring the mounting interest in physically-backed Bitcoin financial products.

The introduction of Hashrate Futures further enriches Bitnomial’s comprehensive Bitcoin derivatives suite, which encompasses Bitcoin Futures, Options, Deci Futures, and now Hashrate Futures. This comprehensive array furnishes diverse tools for risk management and investment in the Bitcoin market.