Miners persevere through crypto winter by selling token derivatives

Crypto winter is still going strong, but some have found a way to keep the cash flowing despite the market's collapse, Bloomberg reports. Miners have turned to trading derivatives to keep busy during the desperate times.

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

Bloomberg notes such trades could help miners profit from their held assets while awaiting better times. However, their possible gains are also substantially limited; if a token's value exceeds strike price, the miner is required to sell their tokens at a lower value. The situation doesn't leave the newly established traders with much choice—for some miners, the cost of their operation now exceeds the tokens' selling price. 

According to former Citigroup Inc. credit derivatives trader Sath Ganesarajah, miners need to stay on their toes throughout the endeavour. “The trading professionals will try to take the miners for a ride by getting them to sell options too cheaply,” he said.