This week’s episode of Market Talks discusses the future of BTC mining and how miners can
maximize profits, as well as the upcoming Bitcoin halving and its impact on the mining industry.
On the latest episode of Cointelegraph’s Market Talks, host Ray Salmond spoke with Dan Rosen,
associate director of derivatives at Luxor, a United States-based Bitcoin BTC$26,020
mining pool, research hub and service provider.
The show touched on a number of broad topics, including Rosen’s view on how the upcoming
Bitcoin halving will impact BTC price, why Bitcoin’s volatility is set to remain in the
double-digits for years to come, and miners’ ability to hedge their operations via hash rate derivatives.
According to Rosen:
“Any maturing asset goes through experiences of high volatility when it first launches,
and if you compare Bitcoin to the tech stocks of the early 90s, like Apple and Google, t
heir volatility was astronomical. Bitcoin has also touched crazy high levels of volatility in the
70% to 100% [range] four years ago. This is dropping over time, but we will continue to
see this trend as the asset becomes more investable and the eventual launch of an ETF
[exchange-traded fund]. One day, we are likely to see a 20% or sub-20% annualized asset class, in maybe four or five years.”
Historically, outside of pledging mined Bitcoin rewards, miners have had few options for hedging risk
within their operations. Luxor’s hash rate derivatives essentially add infrastructure to this area of the
industry by allowing miners to hedge their exposure to changes in hashprice. The derivatives give
miners the option to predict and lock in future revenue during events of
unexpected volatility that impact the efficiency of their operations.
Macro continues to impact Bitcoin’s price and miners
Regarding the macro and how this could impact Bitcoin’s price and its miners, Rosen said,
“The market is starting to realize that we’re probably not going to get to that 2% inflation
target rate any time soon, and it does appear that the market is starting to
price in that inflation longer-term will hover around the 2.5% to 3% range.
At the same time, we’re still seeing the U.S. dollar as a flight-to-safety asset,
and this is impacting equities and creating macro headwinds at the same time,
leading to a depreciated value of dollar-denominated assets.”
Despite this dismal economic outlook, Rosen believes:
“While Bitcoin price might not hit six figures leading into the halving or directly after it,
I wouldn’t be surprised to see new lows over the next six months due to macro headwinds
and then a stronger rally afterward.”
Listen to the full episode of Market Talks on the new Cointelegraph Markets & Research YouTube
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