Wish me luck again?Miners could benefit from Luxor's OTC Bitcoin mining derivatives as "a much needed tool to hedge their mining operations."
The current bear market is a perfect illustration of how energy prices and crypto market volatility can negatively impact miners' profit margins and their ability to remain solvent. Hedging against downside has always been difficult for Bitcoin BTC tickers down $19,084 miners.
Options and futures contracts settled in Bitcoin, stablecoin, and U.S. dollar are frequently used by retail and institutional traders to create hedging strategies that mitigate Bitcoin price declines. Miners now have access to a Bitcoin mining-specific instrument.
Miners will be able to hedge their exposure to Bitcoin price and mining energy costs with the launch of Luxor Hashprice NDF on October 10.
Luxor Technologies says that "hashprice" is the amount of money BTC miners make for each unit of hash rate, which is how much computing power miners use to process transactions on a proof-of-work network.
Luxor's Bitcoin Hashprice Index is used to settle the over-the-counter derivatives contracts, and investors can settle in dollars, BTC, or dollar-pegged stablecoins.Contract buyers and sellers can both take advantage of Bitcoin mining's upside potential without having to physically expose themselves, which is a major advantage of the instrument.
