Miners of the most widespread cryptocurrency Bitcoin (BTC), which has the highest market capitalization compared to other widespread cryptocurrencies, are currently very intensively considering their security options in order to protect the stability of their income due to the sharp volatility of the virtual currency market and especially with regard to cryptocurrency Bitcoin (BTC). As a leading trading and market making firm, GSR offers hedging products to ensure more predictable income for miners. By offering these tools, GSR aims to make the $500 billion (USD) Bitcoin network more resilient.
Currently, during the European morning of Tuesday, September 12, 2023, at approximately 9:16 CET, the value of the cryptocurrency Bitcoin (BTC) against the US dollar (USD) was on the Coinbase digital currency market at a mutual exchange rate of USD 25,728.50 per BTC with BTC up +2.85% vs. USD on the day to date. This mutual exchange rate was achieved in a situation where the exchange value of the USD strengthened within its daily trading trend in a standard foreign exchange market environment. According to the dollar index DXY (US Dollar Currency Index), the value of the USD on the indicated day and time was 104.71 USD points with a daily increase of + 0.14% of the point value according to this index. In this situation, the so-called global currency pair of the single European currency, the euro (EUR) and the US dollar (USD), as the main currency of the commodity markets, moved at a mutual exchange rate of 1.072 USD per EUR, with the daily strengthening of the USD by + 0.242 % exchange rate against EUR.
GSR proposes the use of swap and option products to help miners secure prices for future production. Using swaps, miners can sell their future production at a predetermined price, providing a level of price protection. The advantage of swaps is that the counterparty is likely to agree to a steady increase in price. However, the risk is missing out on potential profits if the price rises significantly. Options, on the other hand, allow miners to buy the right to sell Bitcoin (BTC) at a predetermined price. If the actual price exceeds this level, miners may choose not to exercise the option. However, if the price falls below the option price, miners can still cover their costs. GSR’s report claims that the hedging model has been successfully applied in the oil and gas industry, which is the reason for its adoption in Bitcoin (BTC) mining. The volatile nature of the cryptocurrency market makes it difficult for miners to effectively plan their budgets and investments. However, by not selling their mined bitcoins, miners risk giving up immediate profits and just to optimize their situation and subsequently the crypto market with Bitcoins (BTC).
Bitcoin (BTC) is an Internet open-source P2P payment network and also the cryptocurrency used in this network. The main uniqueness of Bitcoin is its full decentralization; it is designed so that no one, not the author or other individuals, groups or governments, can influence the currency, counterfeit it, seize accounts, control money flows or cause inflation. There is no central point in the network, and no one who can make decisions about the network. The final amount of Bitcoins is known in advance and the release of Bitcoins into circulation is defined in the source code of the network. Payments take place on the network at minimal or no cost. The network has been operating since 2009, where it was described and created by a group of people signed as Satoshi Nakamoto. Bitcoin (BTC) is the only asset that is successfully offsetting the global press side of the world’s central banks, according to analysts at brokerage firms involved in the virtual currency trade.
