Bcause is a Chicago based Bitcoin mining hosting company with a unique vision of how to take some of the risk out of Bitcoin mining. The problem, as has become obvious with the multiple bankruptcies of Bitcoin mining operations during the bear market, is price volatility. If a company builds a mining operation with the expectation of Bitcoin’s price being at a certain level, and it falls below that, they may be forced out of business. Bcause believes they can solve that problem with a simple solution: derivatives.
Options and futures would allow a company to know exactly what price they could expect to sell their Bitcoin for at some point in the future. Explained Thomas Flake, founder of Bcause, “you get rid of some of the uncertainty, which makes investors much happier. If you go from saying, ‘I don’t know what the price of bitcoin will be in nine months,’ to saying, ‘I’ll be able to liquidate it because I have options at $6,500 in December next year,’ suddenly, a lot of uncertainty is off the table.”
Regulatory Approval
In order to make it possible to offer derivatives Bcause has filed applications with the U.S. Commodity Futures Trading Commission. While that’s a necessary first step what remains to be seen is how long it will take to get approval. The cryptocurrency trading platform Bakkt, for instance, has been delayed multiple times. In an effort to speed of approval they’ve even gone as far as acquiring an entire cryptocurrency custodianship company in order to be able to list physically settled futures.
While Bcause is not the only company with the intention to offer Bitcoin derivatives, what sets it apart is that they’re also a Bitcoin mining hosting operation. In 2018, with the help of a $500,000 grant from Virginia Beach, Bcause opened a mining hosting operation in Virginia. According to their website they offer a wide range of services including mining hosting for first time miners. These would probably be the cohort most likely to favor an all-in-one platform. A single website where they could do everything from buy miners to sell their mined Bitcoin at a set price in the future.
It remains to be seen whether Bcause will gain regulatory approval and if they do, how successful their trading service is. However, if they can combine competitively priced mining hosting with an easy to use options and futures exchange, there could be a chance for Bcause to be one of the first all-in-one platforms to reduce the risk of mining Bitcoin.
