How Do Crypto Miners Use “Put Options” as an Alternative Hedging Strategy to Futures?

Miners buy put options to establish a floor price for the cryptocurrency they will mine, without sacrificing potential upside. A put option gives the holder the right , but not the obligation , to sell the underlying asset at a specified strike price before the expiration date.

By paying a premium for the put, the miner protects against a significant price drop below the strike price. If the price rises, they let the option expire worthless and sell their mined coins at the higher market price.