How Does a Futures Contract on Electricity Prices Affect a Miner’s Profitability Strategy?

A futures contract on electricity prices allows a miner to hedge their largest variable operating cost. By locking in a future price for electricity, the miner removes the risk of sudden price spikes, which could otherwise wipe out their profit margin.

This certainty in operating costs enables more accurate long-term profitability planning and capital expenditure decisions for purchasing new mining hardware.