A few new tokens tied to Bitcoin's hashrate are trying to push forward the financialization of cryptocurrency mining. But to date the road has been rocky. Recent performance of Poolin’s and Binance’s tokens demonstrates the immaturity of these mining financial products.

The pBTC35A token

Launched by Poolin in mid January, this ERC-20 token was designed to represent 1 terahash per second (TH/s) of mining equipment that had a power efficiency of 35 Joules per TH (J/TH).

  • Throughout January, the token bounced between $60 and $230 before leveling off around $120 for the next two months.
  • Over the same period, mining rigs with an efficiency of 38 J/TH or lower — roughly the same efficiency range — steadily climbed from just below $60 to near $110 at the end of March, per pricing estimates from Hashrate Index.

In other words, pBTC35A token holders paid an large premium for months before the real hashrate market started to catch up.

Weekly prices for Poolin's hashrate token charted with rig pricing estimates with efficiency under 38 J/TH

Part of the token price’s distortion problem comes from highly illiquid markets. On Uniswap, the token’s most liquid market, daily volume for the past two months averaged less than $500,000, according to TradingView data, with only five days reporting volume above $1 million.

The BTCST token

Backed by Binance, BTC.TOP, and Genesis Mining, the “Bitcoin Standard Hashrate Token” represents 0.1 TH/s at an efficiency of 60 J/TH, a tad lower than Poolin. But its price relative to real machines hasn’t fared much better.

  • Through February, the token climbed from $65 to roughly $490. A full TH/s from hardware with an efficiency range of 38-60 J/TH rose from $50 to near $60 over the same period. Big difference.
  • The token stayed severely disjointed from the real hashrate market even after a significant repricing in mid March when BTCST traded between $30 and $60.

Other financial products

Hashrate tokens aren’t the only product that hasn’t succeeded in financializing the mining market. On cryptocurrency derivatives exchange FTX, bitcoin hashrate futures have also struggled to gain traction and suffered low volume with the exchange discontinuing the contracts after Q1 2021.

Despite these troubles. other teams are still chasing the prize. Blockstream recently launched its own hashrate security token on the Liquid Network, for example. Perhaps one day tokenized hashrate will reflect real hashrate markets. But not today.