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Luxor’s Aaron Forster on Bitcoin Mining’s Growing Sophistication
Luxor Technology wants to make bitcoin mining easier. That’s why the firm has rolled out a panoply of products (mining pools, hashrate derivatives, data analytics, ASIC brokerage) to help bitcoin miners, large and small, develop their operations.
Aaron Forster, the company’s director of business development, joined in October 2021, and has seen the team grow from roughly 15 to 85 people in the span of three and a half years.
Forster worked a decade in the Canadian energy sector before coming to bitcoin mining, which is one of the reasons why he’ll be speaking about the future of mining in Canada and the U.S. at the BTC & Mining Summit at Consensus this year, May 14-15.
In the lead-up to the event, Forster shared with CoinDesk his thoughts on bitcoin miners turning to artificial intelligence, the growing sophistication of the mining industry, and how Luxor’s products enable miners to hedge various forms of risk.
This interview has been condensed and edited for clarity.
Mining pools allow miners to combine their computational resources to have higher chances of receiving bitcoin block rewards. Can you explain to us how Luxor’s mining pools work?
Aaron Forster: Mining pools are basically aggregators that reduce the variance of solo mining. When you look at solo mining, it’s very lottery-esque, meaning that you could be plugging your machines in and you might hit block rewards tomorrow — or you might hit it 100 years from now. But you’re still paying for energy during that time. At a small scale, it’s not a big deal, as you scale that up and create a business around it.
The most common kind of mining pool is PPLNS, which means Pay-Per-Last-N-Shares. Basically, that means the miner does not get paid unless that mining pool hits the block. That’s also due to luck variance, so it’s no different from that solo miner’s situation. However, that creates revenue volatility for those large industrial miners.
So we’re seeing the emergence of what we call Full-Pay-Per-Share, or FPPS, and that’s Luxor is operating for our bitcoin pool. With FPPS, regardless of whether we find a block or not, we’re still paying our miners their revenue based on the number of shares they’ve submitted to the pool. That gives revenue certainty to miners, assuming hashprice stays the same. We’ve effectively become an insurance provider.
The problem is that you need a very deep and strong balance sheet to support that model, because while we’ve reduced the variance for miners, that risk is now put on us. So we need to plan for that. But it can be calculated over a long enough period of time. We have different partners in that regard, so that we don’t bear the full risk from our balance sheet.
Tell me about your ASIC brokerage business.
We’ve become one of the leading hardware suppliers on the secondary market. Primarily within North America, but we’ve shipped to 35+ countries. We deal with everybody from public companies to private companies, institutions to retail.
We’re primarily a broker, meaning we match buyer and seller, mostly on the secondary market. Sometimes we do interact with ASIC manufacturers, and in certain cases we do take principal positions, meaning we use money from our balance sheet to purchase ASICs and then resell them on the secondary market. But the majority of our volume comes from matching buyers and sellers.
Luxor also launched the first hashrate futures contracts.
We’re trying to push the Bitcoin mining space forward. We’re a hashrate marketplace, depending on how you look at our mining pools, and we wanted to take a big leap and take hashrate to the TradFi world.
We wanted to create a tool that allows investors to take a position on hashprice without effectively owning mining equipment. Hashprice is, you know, the hourly or daily revenue that miners get, and that fluctuates a lot. For some people it’s about hedging, for others it’s speculation. We’re creating a tool for miners to sell their hashrate forward and use it as a basic collateral or a way to finance growth.
We said, ‘Let’s allow miners to basically sell forward hashrate, receive bitcoin upfront, and then they can take that and do whatever they need to do with it, whether it’s purchase ASICs or expand their mining operations.’ It’s basically the collateralization of hashrate. So they’re obligated to send us X amount of hashrate per month for the length of the contract. Before that, they’ll receive a certain amount of bitcoin upfront.
There’s a market imbalance between buyers and sellers. We have a lot of buyers, meaning people and institutions wanting to earn yield on their bitcoin. What you’re lending your bitcoin at is effectively your interest rate. However, you could also look at it like you’re purchasing that hashrate at a discount. That’s important for institutions or folks that don’t want physical exposure to bitcoin mining, but want exposure to hash price or hashrate. They can do that synthetically through purchasing bitcoin and putting it into our market, effectively lending that out, earning a yield, and purchasing that hashrate at a discount.
What do you find most exciting about bitcoin mining at the moment?
The acceptance and natural progression of our industry into other markets. We can’t ignore the AI HPC transition. Instead of building these mega mines that are just massive buildings with power-dense bitcoin mining operations, you’re starting to see large miners turning into power infrastructure providers for artificial intelligence.
Using bitcoin mining as a stepping stone to a larger, more capital intensive industry like AI is exciting to me, because it kind of gives us a bit more acceptance, because we’re coming at it from a completely different angle. I think the biggest example is the Core Scientific-CoreWeave deal structure, how they’ve kind of merged those two businesses together. They’re complimentary to each other. And that’s really exciting.
When you look at our own product roadmap, we have no choice but to follow a similar roadmap to bitcoin miners. A lot of the products that we built for the mining industry are analogous to what is needed at a different level for AI. Mind you, it’s a lot simpler in our industry than in AI. We’re our first step into the HPC space, and it’s still very early days there.
Bitcoin (BTC) continued its spring rally on Friday and is on track for its strongest weekly showing since Trump’s election victory.
The largest and oldest cryptocurrency held around $95,000 during U.S. afternoon hours, up 1.8% over the past 24 hours. Ethereum’s ether (ETH) followed closely, gaining 2% to hover just over $1,800. Sui’s native (SUI), Bitcoin Cash (BCH), and Hedera’s HBAR led gains in the broad-market crypto benchmark CoinDesk 20 Index.
Today’s gains cap an exceptional momentum for crypto markets recovering from the early April lows amid tariff turmoil. BTC is up over 11% since Monday, putting it at its largest weekly gain since November 2024, when Donald Trump clinched the U.S. presidency, kickstarting a broad-market crypto rally.
Read more: Bitcoin Traders Target $95K in Near Term; SUI Continues Multiday Rally
Investor appetite from ETF investors also bounced back strongly: U.S.-listed spot bitcoin ETFs recorded $2.68 billion in net inflows this week so far, the largest since December, according to SoSoValue data. (Friday inflow data will be published later.)
BTC decoupling
Bitcoin’s recent strength relative to U.S. stocks and gold underscores BTC’s decoupling from traditional macro assets, said David Duong, Coinbase Institutional’s global head of research.
«It’s rare to witness market inflection points in real time, as we only tend to recognize major regime shifts with the benefit of time and reflection,» Duong said in a Friday report. «This week’s decoupling of bitcoin’s performance from that of traditional macro assets may be as close as we come to such a moment.»
«In our view, this divergence highlights bitcoin’s maturing role as a store-of-value asset—one that is increasingly being viewed by institutional and retail investors alike as resilient against the macroeconomic forces affecting risk assets more broadly,» he wrote.
Doung noted that the thesis is gaining traction with more companies adopting BTC corporate treasuries. Following the success of Michael Saylor’s Strategy, Twenty One Capital, a new firm backed by Tether, Bitfinex, SoftBank, and a Cantor Fitzgerald affiliate, also plans to hold 42,000 BTC at launch.
Due in part to recent accumulation, liquidity in the spot BTC market has been «significantly drained,» Dr. Kirill Kretov, lead strategist at trading automation platform CoinPanel, said in a Telegram note. According to the firm’s proprietary blockchain analysis, a large portion of bitcoin liquidity has been withdrawn from actively transacting addresses, including exchanges, since November 2024, exposing markets to volatile price swings.
“The market is thin, vulnerable, and easily moved by large players,» Kretov said. «Sharp swings of 10% up or down are likely to remain the norm for now.»
Bitcoin’s route to fresh records
While the route could be choppy, this week’s rally is likely the early innings of bitcoin’s next leg higher to new records, said John Glover, chief investment officer of crypto lender Ledn.
Based on his technical analysis using Elliott Waves, he said BTC began the fifth and final wave of its multi-year bull market.
Elliott Wave theory suggests asset prices move in predictable patterns called waves, driven by collective investor psychology. These patterns typically unfold in five-wave trends, in which the first, third, and fifth waves are impulsive rallies, while the second and fourth waves are corrective phases.
While retesting this month’s low at $75,000 cannot be ruled out, Glover sees BTC climbing to a cycle top around late 2025, early 2026.
«My expectations continue to be for a rally to $133-$136k into the end of this year, beginning of next,” he said.
Read more: Bitcoin Whales Return in Force, Buy the BTC Price Rally, On-Chain Data Show
The Swiss National Bank has rejected holding bitcoin reserves, citing concerns over cryptocurrency market liquidity and volatility.
«For cryptocurrencies, market liquidity, even if it may seem ok at times, is especially during crises naturally called into question,” said SNB President Martin Schlegel at the bank’s General Assembly meeting Friday.
“Cryptocurrencies also are known for their high volatility, which is a risk for long term value preservation. In short, one can say that cryptocurrencies for the moment do not fulfill the high requirements for our currency reserves.”
Schlegel’s comments were prompted by the Bitcoin Initiative, a bitcoin advocacy group whose research demonstrates that adding bitcoin to Switzerland’s treasury would complement its overall portfolio and yield substantial return with minimal volatility.
Without bitcoin, the Swiss National Bank’s investments grew by about 10% since 2015. A 1% bitcoin allocation to the central bank’s portfolio would have nearly doubled returns over the same period, according to a Bitcoin Initiative portfolio simulation. Annualized volatility would have increased only slightly.
The Bitcoin Initiative emphasized that bitcoin’s volatility should not be evaluated in isolation, but in terms of its influence on the overall dynamics and performance of the investment portfolio.
“[Bitcoin] price reached new highs, it showed resilience under market stress, and it continues to be highly liquid with trading volumes in the double digit billions, every day and night, even on bank holidays,” said Luzius Meisser, a member of the Bitcoin Initiative and board member of Bitcoin Suisse.
“The Bitcoin network remains one of the most reliable and secure IT systems ever created. And most remarkably, the United States has started a strategic bitcoin stockpile.”
In an emailed statement to CoinDesk, the Bitcoin Initiative suggested the Swiss National Bank’s aversion to bitcoin might be political, as it could be perceived as “an expression of distrust towards other currencies” and harm delicate relations between Switzerland and the European Union.
European Central Bank President Christine LaGarde has consistently criticized bitcoin, calling it “worth nothing” and a “highly speculative asset” linked to money laundering. In January, Lagarde said “I’m confident” that “bitcoins will not enter the reserves of any of the central banks of the General Council” of the ECB.
That was in response to comments made by Czech National Bank Governor Ales Michl that his institution was evaluating adding bitcoin to its reserves. LaGarde argued that bitcoin fails to meet the ECB’s criteria for liquidity, security, and safety from criminal associations.
In February, Poland’s central bank ruled out “keeping reserves in bitcoins under any circumstances” and the Romanian central bank warned banks not to issue loans to crypto companies.
Federal Reserve chair Jerome Powell said in December 2024 that the U.S. central bank was “not allowed to own bitcoin” per the Federal Reserve Act and it’s not looking to change the law.
The Swiss National Bank has indirect bitcoin exposure through stocks that own corporate bitcoin treasuries, including 520,000 shares of Strategy, 8.12 million shares of Tesla, 580,000 shares of MARA Holdings, and 500,000 shares of CleanSpark, as of the end of 2024 according to Fintel data.
Schlegel rejected citizen calls to add bitcoin reserves to the Swiss central bank’s coffers as recently as last month. When it comes to technological advancements, Schlegel noted Thursday that the SNB is running a pilot project using central bank digital currencies to facilitate payments between financial institutions.
By contrast, U.S. President Donald Trump signed an executive order this year that establishes a strategic bitcoin reserve and crypto stockpile, along with a Crypto Council that will evaluate budget neutral ways to supplement U.S. digital reserves. The order further prohibits government agencies from creating or promoting a central bank digital currency in the United States out of privacy concerns for citizens.
Consensus, one of the leading events in the crypto conference calendar, will take place in Miami, Florida, CoinDesk announced today.
Consensus 2026 will take place May 5-7 at the Miami Beach Convention Center. The first Consensus was in 2015, starting in New York City. The event went virtual during the pandemic lockdown before moving to Austin, Texas in 2022, 2023 and 2024. This February, CoinDesk held its first Consensus in Hong Kong, attracting more than 10,000 attendees.
Consensus 2025, the North American flagship event, will take place in Toronto May 14-16, featuring headline speakers such as Eric Trump, Charles Hoskinson and Sergey Nazarov. Up to 15,000 people are expected, according to the organizers.
«We are excited to announce that the Consensus conference will be relocating to Miami in 2026,” said Michael Lau, Consensus Chairman.
“As a leading tech and crypto hub, Miami provides an exceptional setting for innovation and collaboration. Its vibrant culture, strategic location, and international connectivity make it an ideal destination for participants from around the world.
“The largest industry-wide conference across the Americas, Consensus in Miami will serve as a pivotal meeting point for innovators and leaders, facilitating the most consequential conversations and business opportunities in this thriving metropolis.»
Tickets for Consensus Miami will go on sale during Consensus 2025 in Toronto.
Bitcoin Poised for Strongest Weekly Gain Since Trump Win as ETFs Gobble $2.7B Inflows
Swiss National Bank Rejects Calls to Add Bitcoin Reserves
CoinDesk Announces Consensus 2026 in Miami
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