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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 Luxor’s Derivatives Desk This includes six-month tenor contracts and daily settlement rates, providing market participants with extended contract tenors and instant access to liquidity. The press release states that the addition of these features increases hedging efficiency and lowers the cost of capital in the bitcoin mining derivatives sector.
Expressing his enthusiasm for the innovative pricing model, Luxor Head of Derivatives Matt Williams said, “This innovative pricing model takes Hashprice contracts to the next level.” He emphasized that the integration of daily settlement rates makes their offering more attractive to traditional finance investors, thereby expanding the reach of Luxor’s hashprice marketplace beyond the mining sector. “This development underscores Luxor’s vision to turn hashrate into a viable asset class,” Williams said.
The increased liquidity is expected to improve the cost of capital for miners as more participants join the Luxor derivatives desk, the press release explained. This update comes at an opportune time, as miners approach the bitcoin halving in 2024, which will result in a 50% reduction in the BTC value of the block subsidy. Luxor’s six-month hashprice contract can help miners plan long-term hedging strategies to deal with impending volatility.
Nick Hansen, CEO and co-founder of Luxor, praised the upgrade as reaffirming the company’s commitment to financial innovation in the bitcoin mining sector. He described this as a progression in his approach to Hashrate as an asset class and expressed his excitement about bringing this forward-looking product to their extensive customer base already using Hashprice contracts.
Hashprice contracts are traded on the OTC marketplace of Luxor Derivatives, allowing sellers to secure bitcoin mining revenue and buyers to access the non-physical risk of bitcoin mining. Luxor’s derivatives desk facilitates order matchmaking, manages counterparty risk and settles payments using the bitcoin hashprice index as a reference rate for expected mining revenue.
