Luxor Technologies, a Bitcoin mining software and services company, has announced the expansion of its Bitcoin mining derivatives contracts. According to a press release sent to Bitcoin Magazine, the new offering from Luxor’s Derivatives Desk includes six-month duration contracts and daily settlement rates, providing market participants with extended contract periods and swift access to liquidity. The press release stated that the addition of these features enhances hedging efficiency and reduces the cost of capital in the Bitcoin mining derivatives space.
Matt Williams, Luxor’s Head of Derivatives, expressed his enthusiasm for the innovative pricing model, stating, „This innovative pricing model takes Hashprice contracts to the next level.“ He emphasized that the integration of daily settlement rates makes their offerings more attractive to traditional finance investors, expanding the reach of Luxor’s Hashprice Marketplace beyond the mining sector. Williams added, „This development underlines Luxor’s vision of transforming hashrate into a viable asset class.“
The press release described how as more participants join the Luxor Derivative Desk, the increased liquidity is expected to improve the cost of capital for miners. This update comes at an opportune time, with miners approaching the 2024 Bitcoin halving, which will result in a 50% reduction in the BTC value of block subsidies. Luxor’s six-month Hashprice contracts could assist miners in planning long-term hedging strategies to navigate the impending volatility.
Luxor CEO and co-founder, Nick Hansen, commended the upgrade, affirming the company’s commitment to financial innovation in the Bitcoin mining sector. He described it as an advancement in their vision of hashrate as an asset class and expressed excitement about bringing this forward-looking product to their extensive client base already using Hashprice contracts.
The Hashprice contracts are traded on Luxor Derivative’s OTC Marketplace, enabling sellers to secure Bitcoin mining revenue and buyers to access non-physical exposure to Bitcoin mining. Luxor’s Derivatives Desk facilitates order matchmaking, manages counterparty risk and settles payments using the Bitcoin Hashprice Index as the reference rate for expected mining revenue.