Traders Can Now Bet on the Bitcoin Mining Difficulty With FTX’s Futures

Cryptocurrency derivative exchange FTX has announced the launch of Bitcoin Hashrate Futures. According to the announcement, contracts end at the end of each quarter on average Bitcoin mining difficulty. The products are designed to help miners secure themselves against Bitcoin's difficulty adjustment.

A new Bitcoin product goes live under FTX

Bitcoin hashrate futures have just been launched on FTX, a cryptocurrency exchange whose innovative products like the president and leveraged tokens have brought it to the top of the derivatives market.

According to According to the company's announcement, the Bitcoin Hashrate futures are contracts that expire over a period of time up to the average Bitcoin mining difficulty level. This, according to the company, means that they represent all of the hash power that is used to extract Bitcoin.

The hashrate futures launched today begin at the beginning of a quarter and expire at the end of the quarter. For example, the hashrate future of the Q32020 for a period between July and September 2020 will have the average difficulty in mining Bitcoin.

The current Bitcoin difficulty is 16.10T. Futures fall on average over the quarter's difficulties divided by a trillion.

The problem of measuring hashrate

Since Bitcoin's hashrate cannot be measured accurately, FTX states that the data from block times and levels of difficulty are approximated. The company said that given that difficulty adjustments aim to maintain 10-minute block times, the long-term average hashrate, such as a quarter, will most likely be proportional to the average difficulty.

Therefore, the “difficulty futures” behave similarly to hashrate futures.

FTX started examining futures and options products with hashrate and bitcoin dominance back in August last year after its native cryptocurrency listed the FTT token. So far, the stock exchange is planning dominate The derivatives market has recognized this – first with the launch of the presidential token earlier this year and then after the launch of innovative products such as oil futures, volatility tokens and various other leveraged tokens.

According to Data from CoinGecko, FTX is currently the fifth largest futures exchange with a 24-hour open interest of over $ 314 million and a 24-hour volume of over $ 1 billion.

Crypto derivative exchanges, sorted by 24-hour open interest

Crypto derivative exchanges, sorted by 24-hour open interest. (Source: CoinGecko)

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