Bitcoin Miners Will Use Derivatives Like Traditional Commodity Producers

[Nostoman]

Miners need traditional financial products in order to hedge against the risk of increasing hash rate and difficulty.
Bitcoin (BTC) mining has become a multibillion-dollar industry. Pools, manufacturers and farms contribute to the growth and professionalization of the space. Financial service companies bring institutional-grade products and capital that increases liquidity for the biggest operators.

There’s a fundamental shortage of United States dollars available relative to the overall demand when the sector encounters certain market conditions. The dollar shortage is one of the contributing factors to volatility in the markets.

Just like traditional commodity producers, Bitcoin miners will likely become large users of derivatives — whether it’s with futures to lock in prices or options to hedge against losses. Everybody with a business that has relatively predictable cash flow is going to have an appetite for access to debt in order to reduce the capital requirements necessary to fund their growth.
More info: https://cointelegraph.com/news/bitcoin-miners-will-use-derivatives-like-traditional-commodity-producers