Share this article
CME Patent Sees Derivatives Opportunity in Bitcoin Mining
Derivatives giant CME Group is looking to patent a way for bitcoin miners to hedge against the risks they face.
By Stan Higgins
Updated Sep 11, 2021, 1:14 p.m. Published Apr 17, 2017, 1:35 p.m.
Derivatives giant CME Group is looking to patent a way for bitcoin miners to hedge against operational risks.
As detailed in a patent application published last week by the US Patent and Trademark Office, the proposed system would receive data from the bitcoin network as a means of keeping contracts up to date – monitoring metrics like network difficulty and price.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
CME previously launched a pair of bitcoin price indexes last year.
The filing is notable as bitcoin mining, the process by which new transactions are added to the bitcoin blockchain, is a kind of commodities production. Miners expend energy and manpower in exchange for newly minted bitcoins.
Yet, the ever-rising difficulty of mining can mean ever-encroaching costs for for miners.
With the mining derivative, "a miner can lock in a projected growth rate of the difficulty factor", the patent filing reads.
The application goes on to explain:
"If the network hash rate grows faster than anticipated, the income from mining may fall, but the variation and settlement of the futures or the funds received by exercising a cash-settled call option contract would cover the loss. On the other hand, if the difficulty factor grows more slowly than anticipated or falls, the contract would lose value or the call option premium would expire as worthless, but a miner would make more money than expected on mining operations."
Per the application, CME envisions the bitcoin mining derivative as a way to position against the depreciation of mining hardware as well.
"...as the difficulty factor rises, mining computers may become less marketable, so taking a long position in the generated contract, or being long a call option on the generated contract, would allow manufacturers to lock in a projected growth rate of the difficulty factor and hedge against the risk of falling hardware prices," CME continues.
CME first applied for the patent on 13th October, 2015. Mansoor Ahmed, Ryan Pierce and Sandra Ro are listed as inventors.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, in which CME Group is an investor.
Image Credit: Felix Lipov / Shutterstock.com
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
Traders mull the bottom as bitcoin returns to week's lows below $86,000
One analyst isn't quite ready to call a bottom, but says bitcoin is surely in an oversold condition.
What to know:
- Bitcoin's early rally Wednesday seems a faint memory as the price has returned to the week's lows.
- Precious metals continue to get bid, with silver rushing to yet another new record and gold closing in on an all-time high.
- One analyst cautioned against reading too much into the current bitcoin price action due to year-end positioning and tax considerations.
Top Stories
