How Does a Miner Mitigate Basis Risk When Using a Futures Hedge?

Miners can mitigate basis risk by choosing a futures contract that expires as close as possible to the date they expect to sell their mined crypto. They can also use highly correlated futures contracts if a direct contract is unavailable, though this introduces "cross-hedging" risk.

Furthermore, they must closely monitor the basis throughout the life of the contract and be prepared to adjust their hedge ratio if the correlation between the spot and futures price changes unexpectedly.