Lending Into Mining: How Steelhead Used Luxor’s Hashrate Forwards to Lend with Confidence

Background

Steelhead Capital Management is a Fort Worth, Texas-based family office focused on long-term capital preservation and growth, with a focus on sound, risk-adjusted exposure across traditional and digital assets. As part of its broader Bitcoin strategy, Steelhead saw an opportunity to generate BTC-denominated returns by lending into the mining sector — but only with the right risk controls in place.

Challenge

While mining can generate compelling BTC yields, it also presents unique risks: volatile revenues, operational uncertainty, and opaque counterparties. For Steelhead, the challenge was finding a way to lend into the mining ecosystem while preserving capital and delivering a predictable return.

Solution

Steelhead partnered with Luxor on a lending structure combining two of Luxor’s hashrate derivatives: the Deliverable Forward and the Non-Deliverable Forward (NDF).

• With the Deliverable Forward, Steelhead purchased physical hashrate upfront, which was then delivered directly to Luxor Pool.
• Then, by layering on a Non-Deliverable Forward, Steelhead locked in a fixed hashprice — eliminating their exposure to hashprice fluctuations and securing a stable BTC-denominated yield.

The entire process — hashrate delivery, reward distribution, and settlement — was handled seamlessly through Luxor Pool, giving Steelhead operational simplicity and confidence in repayment flow.

Results

Steelhead unlocked several advantages by leveraging Luxor’s derivatives and infrastructure:

• Fixed BTC Yield: Earned a predictable return while eliminating revenue volatility from hashprice swings
• Risk-Mitigation: Counterparties must pass strict credit profiling requirements and upfront payments are collateralized with hashrate. Daily repayment through Luxor Pool reduces exposure throughout the duration of the contract.
• Operational Ease: Integrated settlement removed the friction of daily miner payments and ensured consistent performance

Conclusion

By combining deliverable and non-deliverable hashrate forwards, Steelhead found a capital-efficient, risk-managed way to lend into Bitcoin mining. Luxor’s integrated platform turned hashrate into a Bitcoin-native fixed return product, opening a new secure path for institutional capital to enter the mining sector.