According to Luxor’s Twitter post, “For years now, Luxor has been working on a derivatives product tailored specifically for miners. We are thrilled to announce that this is now a reality with the Luxor Hashprice Non-Deliverable Forward.”
Crypto software and services company, Luxor, has finally introduced a new product, Luxor Hashprice NDF. This product will enable investors and companies to lock in profits using Bitcoin mining derivatives.
It has been quite a challenge for miners to hedge themselves against plummeting Bitcoin prices. To reduce the effects of the downward trend, traders often create hedging strategies. They do this using Bitcoin or stablecoins.
To further allow for a deep-rooted strategy that allows miners to hedge against Bitcoin prices, Luxor created the Luxor Hashprice NDF solution.
Announcing this in a tweet, Luxor stated,
“For years now, Luxor has been working on a derivatives product tailored specifically for miners. We are thrilled to announce that this is now a reality with the Luxor Hashprice Non-Deliverable Forward.”
The NDF product will also enable miners to hedge their exposure to the energy costs associated with mining. It will be traded over the counter and will be based on hashprice.
Luxor stated that “hashprice” could be regarded as the revenue BTC miners generate by hashrate. The hashrate is the total computational power used by miners who process transactions on the PoW network.
With the current bear market taking its toll on Bitcoin prices, Luxor Hashprice NDF is here to help investment firms like prop traders to stay afloat.
Luxor confirmed this in one of its tweets, where it stated,
“In addition to giving miners a much-needed hedge, this derivative will allow hedge funds, financial institutions, and other trading firms to gain exposure to Bitcoin mining via hashprice without having to operate physical mining assets.”
It is worth knowing that the product contracts will be US dollar-based. However, Luxor will provide buyers and sellers of the derivatives the option to reconcile them in Bitcoin or US dollars.
Luxor will also facilitate the order matchmaking and settlement process. It will ensure that the contract durations are flexible depending on the customer’s needs.
