Hashrate-backed securities: a definitive guide to the emerging asset class.

1Defining the asset class

A hashrate-backed security is a financial instrument whose underlying collateral is a contractually defined quantity of Bitcoin mining computational capacity, measured in hashes per second, deployed for a fixed term. The instrument entitles the holder to the economic output of that capacity (block rewards and transaction fees produced over the term), net of operating costs and predefined fees.

The asset class sits at the intersection of three established categories: structured commodity finance, infrastructure debt, and digital asset securities. It borrows the collateral isolation and tranching mechanics of structured finance, the long-tenor cashflow profile of infrastructure debt, and the onchain settlement layer of tokenized securities.

Hashrate is the unit of work performed by the Bitcoin network. Mining facilities deploy specialised computers (ASICs) that compete to solve the cryptographic puzzle securing each Bitcoin block. The probability of solving a given block is directly proportional to the fraction of total network hashrate a miner controls. A petahash per second (1 PH/s) is one thousand trillion hashes per second, a unit large enough to represent an institutionally meaningful slice of the network.

Hashrate is not Bitcoin. It is the productive industrial capacity that produces Bitcoin. A hashrate-backed security therefore behaves more like a securitised infrastructure cashflow than a direct cryptocurrency holding. The instrument has a finite life, a defined cost structure, and a measurable productivity output, characteristics that align it with conventional reserve-backed and infrastructure-backed notes rather than with spot crypto exposure.

2How hashrate-backed securities compare to established asset classes

2.1 Versus mortgage-backed securities (MBS)

An MBS pools residential or commercial mortgage cashflows and issues notes against them. Investors receive a stream of interest and principal as borrowers pay down their loans. Hashrate-backed securities share the core structural mechanic of pooling productive cashflow-generating assets inside a bankruptcy-remote vehicle, but the underlying collateral differs in three important ways.

First, the cashflow is denominated in a commodity (Bitcoin), not a fiat currency, exposing the investor to commodity price as well as production volume. Second, the production volume itself is governed by an algorithmic schedule (the Bitcoin issuance curve and halving cycle) rather than by borrower behaviour. Third, there is no pool of borrowers who can default; the credit and counterparty exposure is to the hashrate supplier, the custodian and the issuer's compartment, alongside operational and market risk.

2.2 Versus oil and gas reserve-backed notes

Reserve-backed lending in the energy industry advances capital against a defined volume of proven, producible reserves. The instrument is sized against an engineering report and repaid from production revenue over time. The analogy to hashrate-backed securities is precise. A petahash of contracted hashrate is the digital equivalent of a proven reserve: a quantified, productive resource with a measurable output curve and a finite useful life.

Both instruments share the same three-variable economic profile: production rate, commodity price, and operating cost. Both are exposed to price volatility of the underlying commodity. Both rely on operational due diligence (in mining, on facility uptime and power agreements; in energy, on wellhead and pipeline performance). The principal divergence is settlement: oil and gas notes settle in cash; hashrate-backed securities can settle either in cash or in the underlying commodity (Bitcoin) itself.

2.3 Versus infrastructure debt

Infrastructure debt funds finance long-life physical assets (toll roads, power plants, data centres, fibre networks) and receive contracted payments over multi-year horizons. Bitcoin mining infrastructure is, economically, a power-intensive data centre that produces a single output: hashes. The fixed-tenor, asset-backed cashflow profile of a hashrate-backed security is directly comparable to a junior infrastructure debt tranche.

The principal difference is that traditional infrastructure debt earns a contracted return (often inflation-linked) under a concession or offtake agreement, while hashrate-backed securities earn a market return based on the prevailing Bitcoin price and network difficulty. The instrument is therefore better understood as infrastructure debt with embedded commodity exposure rather than as pure infrastructure debt.

2.4 Versus structured commodity notes

Structured commodity notes (gold-linked notes, oil-linked notes, agricultural notes) reference a commodity price and pay out based on a defined formula. They are typically issued by banks as derivatives rather than as claims on physical inventory. Hashrate-backed securities differ because they reference a productive process rather than a price index. The investor is not buying a Bitcoin price derivative; the investor is buying the right to the Bitcoin that a defined quantity of mining capacity actually produces over a defined period.

This distinction matters for accounting, regulatory treatment, and risk allocation. A hashrate-backed security is structurally an asset-backed note, not a derivative, and is typically issued under securitisation regimes rather than under structured products frameworks.

3Legal structures used by issuers

No single jurisdiction dominates the hashrate-backed market yet. Issuers select structures based on investor base, tax neutrality, regulatory clarity for digital assets, and the ability to ring-fence collateral. Four structures recur.

3.1 Luxembourg securitisation vehicle

The Luxembourg Securitisation Law of 22 March 2004, as amended, is the most developed framework in Europe for issuing asset-backed securities. It permits the creation of securitisation vehicles (either funds or companies) that can issue securities in segregated compartments, each with its own pool of assets, liabilities, and creditors. A compartment is bankruptcy-remote from every other compartment and from the issuer itself.

For hashrate-backed securities, the compartment structure is well suited. Each series of notes can be housed in a dedicated compartment, with its own contracted hashrate, its own custodied Bitcoin output, and its own security agent acting for noteholders. The 2004 law also permits a wide range of underlying assets, including digital assets and contractual rights, which has allowed Luxembourg to become a leading jurisdiction for tokenized asset issuances.

Investors typically qualify as professional investors under Annex II to Directive 2014/65/EU (MiFID II). Distribution is by private placement. The vehicle is tax-neutral at the issuer level, which is important for institutional acceptance.

3.2 Cayman Islands SPV

Cayman remains a default jurisdiction for offshore structured finance. Issuers can incorporate an exempted company as an orphan SPV, with shares held by a charitable trust to achieve bankruptcy remoteness from the sponsor. Notes are typically issued under English-law deeds and listed on the Cayman Islands Stock Exchange or another offshore venue.

Cayman structures are flexible and well understood by global institutional buyers, and segregated portfolio companies are available, though many issuers still use a separate SPV for each series. They are common for issuers targeting Asian and US institutional buyers who do not require an EU regulatory wrapper.

3.3 US Regulation D private placement

Issuers targeting US investors typically rely on Rule 506(b) or Rule 506(c) of Regulation D under the Securities Act of 1933. These exemptions permit private placement to accredited investors and (in the case of 506(b)) up to 35 sophisticated non-accredited investors. The issuer is usually a Delaware LLC or statutory trust, with the security defined under state law (commonly Delaware) as a note or trust certificate.

The SEC's evolving guidance on digital asset securities means that US-domiciled hashrate-backed instruments often combine a traditional securities wrapper with a tokenized record-keeping layer, rather than issuing native onchain tokens directly. The token, in this construct, serves as a digital certificate of ownership rather than as the security itself.

3.4 Other EU securitisation vehicles

Beyond Luxembourg, issuers use Irish section 110 companies or other EU securitisation vehicles, placed with professional investors under each country's private placement rules. The choice depends on investor preferences, listing venues, and the desired regulatory perimeter for the token itself (including alignment with the EU Markets in Crypto-Assets Regulation, or MiCA, for non-security tokens).

4The tokenization layer and why it matters

Tokenization is not what makes a hashrate-backed security a security. The security is created by the underlying legal structure, the contractual claim on cashflows, and the regulatory regime under which it is offered. Tokenization is a recording and transfer mechanism that runs alongside (or in place of) a traditional securities registry.

There are three reasons issuers tokenize.

Settlement velocity. A tokenized note can be transferred onchain twenty-four hours a day with cryptographic finality, eliminating the multi-day settlement cycles and cut-off windows of conventional securities infrastructure. For an asset whose underlying commodity (Bitcoin) trades continuously, settling the security on the same cadence reduces basis risk between the note and its collateral.

Composability. A tokenized security can be used inside other onchain financial primitives: posted as collateral in lending markets, held by smart-contract treasuries, or routed through compliance-gated liquidity venues. This expands the universe of holders and use cases without changing the underlying instrument.

Native transparency. The tokenization layer can carry attestations directly: published hashrate output, custody balances, NAV updates, and audit confirmations can be written to a public ledger as cryptographically signed statements. Investors and regulators can verify these independently rather than relying solely on the issuer's reporting.

For institutional acceptance, tokenization is paired with transfer restrictions that enforce eligibility rules at the protocol level. Whitelisted-address registries, identity-bound token standards (such as ERC-3643), and permissioned transfer hooks ensure that only qualified investors can hold the security, preserving the private placement perimeter required by the offering documentation.

5Lifecycle of a hashrate-backed security

5.1 Structuring and issuance

The issuer constructs the offering by assembling four components: a legal vehicle (typically a compartment of a securitisation fund), a hashrate procurement plan with one or more mining facilities or hosting providers, a Bitcoin custody arrangement with a regulated digital asset custodian, and a security agent representing noteholders. Offering documentation is prepared (typically a private placement memorandum, a subscription agreement, and supporting risk disclosures) and the security is marketed to professional investors.

Subscriptions are received in fiat or stablecoin. On the closing date, the issuer deploys the proceeds to procure the contracted hashrate, secure custody, and pay structuring costs. The token representing the security is minted onchain and distributed to the whitelisted wallets of subscribers.

5.2 Operational phase and onchain attestations

Once the security is live, the underlying hashrate begins producing Bitcoin. Production is tracked at the pool level (the mining pool to which the contracted hashrate is directed) and reconciled against contracted capacity. Mined Bitcoin is swept on a defined cadence (typically daily) into segregated custody accounts at the appointed custodian.

Throughout the operational phase, attestations can be published onchain. Typical attestations include: realised hashrate (a measure of the actual computational work performed by the contracted facilities), uptime, custodian balance confirmations, accrued Bitcoin per note, and updated net asset value. Where used, these attestations are cryptographically signed by the relevant party (custodian, administrator, or auditor) and recorded to the public ledger.

The combination of pool-side production data and custodian-side balance attestations gives investors a continuously verifiable picture of the security's economic state. Conventional asset-backed securities rely on quarterly servicer reports; hashrate-backed securities can make the equivalent data available far more often, though what each issuer reports, and to whom, is set by its offering documentation.

5.3 Distribution mechanics

Distribution mechanics vary by structure. Three patterns dominate:

• Accrual at maturity. All mined Bitcoin accrues inside the compartment and is distributed at the end of the fixed tenor. Investors receive Bitcoin (or, at their election, cash equivalent) in a single bullet payment, net of fees and expenses. This pattern maximises operational simplicity and minimises ongoing tax events for many investor types.
• Periodic distribution. Mined Bitcoin is distributed on a defined schedule (monthly or quarterly) to noteholders' whitelisted wallets. This pattern provides ongoing cashflow but introduces operational and tax complexity at every distribution date.
• Reinvestment compartments. Mined Bitcoin is automatically converted into additional hashrate exposure or otherwise reinvested inside the compartment, with a single principal repayment at maturity. This pattern is less common and is more suited to wealth-preservation mandates than to yield mandates.

5.4 Secondary trading

A defining feature of tokenized hashrate-backed securities is their potential for secondary liquidity. Because transfers can be recorded onchain twenty-four hours a day and reflected in the issuer's register, secondary trading can occur on permissioned trading venues, through onchain order books with whitelisted participants, or via bilateral OTC transfers settled on the same ledger.

In practice, secondary markets for hashrate-backed securities are still nascent. Liquidity depends on the size of the issuance, the breadth of the investor base, and the existence of compliant trading venues. Investors should expect limited secondary liquidity, similar to a private credit fund interest. Over time, as issuance sizes grow and infrastructure matures, secondary liquidity is expected to improve.

5.5 Maturity and unwind

At maturity, the issuer redeems each note in accordance with the offering documentation. For a Bitcoin-settled instrument, the custodian transfers the accrued Bitcoin to each noteholder's designated wallet. For a cash-settled instrument, the custodian liquidates the position on or before the maturity date and distributes proceeds in fiat or stablecoin. The token is then burned, and the compartment is wound up.

If the issuer has contracted hashrate beyond the maturity date (for example, by purchasing a 30-month hashrate package to back a 24-month note), the residual capacity is sold or rolled into a subsequent series. Disposal of physical mining equipment, if owned, is handled by the operator under the terms of the underlying procurement agreements.

6Risk factors institutional investors should consider

Hashrate-backed securities carry a defined set of risks. The most material categories are below.

6.1 Bitcoin price risk

The economic return is denominated in Bitcoin. A decline in the Bitcoin price reduces the realised return on the instrument when measured in fiat terms. Investors with fiat-denominated liabilities or accounting frameworks must consider Bitcoin price volatility in their risk budgets. Some structures offer optional hedging at the compartment level; most leave the price exposure unhedged to preserve direct commodity exposure.

6.2 Network difficulty risk

Bitcoin network difficulty adjusts approximately every two weeks to maintain a constant block production rate. As more hashrate joins the network, the share of block rewards per unit of hashrate declines. A material increase in global hashrate during the tenor of the note reduces the Bitcoin produced per petahash and therefore reduces the realised return.

6.3 Halving cycle exposure

The Bitcoin block subsidy halves approximately every four years. Notes that span a halving event experience a step reduction in production. Issuers and investors model this explicitly in pricing the instrument. Transaction fee revenue partly offsets the subsidy reduction, but the magnitude of that offset depends on network activity.

6.4 Operational and counterparty risk

Production depends on the uptime and performance of the contracted mining facilities. Power outages, equipment failures, regulatory action in the host jurisdiction, and counterparty insolvency at the facility operator can all reduce production. Diversification across multiple facilities and jurisdictions mitigates concentration. Service-level agreements, performance bonds, and operator covenants further allocate this risk.

6.5 Custody risk

The mined Bitcoin must be held by a regulated custodian until distribution. Custodial failure (insolvency, security breach, operational error) is a tail risk. Institutional structures use regulated custodians with cold-storage practices, fidelity insurance, and segregated client accounts. Onchain attestations of custody balances provide continuous verification.

6.6 Legal and regulatory risk

Securities laws, digital asset regulations, and tax treatment of mining revenue all continue to evolve. Material changes in any of these regimes during the tenor of a note could affect distributions, transferability, or eligibility of holders. Issuers typically address this with broad covenants and provisions for compartment reorganisation if required.

6.7 Smart contract and tokenization layer risk

Where the security is recorded as a token, vulnerabilities in the token contract or the underlying blockchain create operational risk. Mitigation includes use of audited, widely deployed token standards (such as ERC-3643), formal verification of custom logic, multisig administrative controls, and, as for OMN, keeping the issuer's register as the definitive record of ownership, with the token as its mirror.

6.8 Liquidity risk

Secondary markets for hashrate-backed securities are still developing. Investors should assume the instrument is held to maturity and size positions accordingly. Some structures provide for early redemption windows or sponsor-arranged liquidity at defined valuation methodologies, but these are not universal.

7The Omnes Mining Note as one implementation

The Omnes Mining Note (OMN) is one implementation of the hashrate-backed security model, structured for professional investors with a preference for a Luxembourg legal structure and onchain transfer. OMN is issued as a tokenized debt security under the Luxembourg Securitisation Law of 22 March 2004 from a dedicated compartment of the Omnes Securities Fund, with each note carrying a notional 1 PH/s of contracted Bitcoin hashrate over a 730-day term. Distributions are paid in Bitcoin at maturity. The total expense ratio is 3 percent, included in the price of the note, with no performance fee. Costs and any tax liabilities rank ahead of noteholders.

OMN illustrates the design choices available to issuers in this asset class: a Luxembourg compartment for collateral isolation, a MiCA-authorised crypto-asset custodian, Zodia Custody (Europe) S.A., for Bitcoin custody, a UK-based security agent (Apex Corporate Trustees) representing noteholders, independent audit, and a tokenized issuance on the Base network with transfer restrictions enforcing professional investor eligibility. Other issuers may choose different jurisdictions, custodians, or settlement layers; the structural principles remain the same.

For a detailed product description, see the OMN product page. For general questions on the asset class, see the FAQs. For investor enquiries, contact Investor Relations.

8Where the asset class goes from here

Hashrate-backed securities are early in their development. Issuance to date is small next to established alternative credit markets. Several developments are likely to shape the next phase.

Standardisation of attestations. Common formats for hashrate, uptime, custody, and NAV attestations will let investors compare offerings on a like-for-like basis, reducing diligence cost and enabling index construction.

Secondary market infrastructure. Compliant onchain trading venues, with built-in eligibility checks and atomic delivery-versus-payment, will reduce liquidity risk and broaden the investor base.

Rating coverage. Engagement with credit rating agencies will, in time, produce structural ratings methodologies for hashrate-backed compartments, opening the asset class to investors with rating-driven mandates.

Maturity diversity. Tenors are still few. As production data and pricing curves develop, both shorter (12-month) and longer (60-month) tenors become viable, allowing investors to construct duration-matched portfolios.

For institutional investors evaluating compute-linked exposure, the question is no longer whether productive Bitcoin mining capacity can be structured into a recognisable security. The structures exist, the operational track record is accumulating, and the legal frameworks are established, though they continue to evolve. The question is which implementations meet a given mandate's risk, regulatory, and reporting requirements, and how the asset class fits within a broader allocation framework.

This article is for information purposes only and does not constitute an offer, solicitation, or recommendation to invest. Any investment in a hashrate-backed security is made solely on the basis of the relevant offering documentation. Investments are speculative and involve a high degree of risk. Past performance is not indicative of future results.