Investing in the Growing BTC Mining Industry Can Strengthen Your Position & Help Put Your Extra Cash to Work
Why Should You Care About Asset Diversification?
Never put all of your eggs in one basket. It’s a simple credo that most of us follow in our daily lives, but it’s often forgotten when it comes to managing a business. Sure, maybe your personal investment portfolio is safely diversified, but can you say the same about your company’s assets?
There are always ups and downs in any industry. The best way to prepare for those waves is asset diversification. This investing strategy aims to reduce the overall risk of an investment portfolio by spreading holdings across a range of asset classes. The idea is that by holding a mix of assets, the performance of any one asset class is less likely to have a significant impact on the overall portfolio.
Again, if you’re reading this, then you probably already understand the concept of diversifying your investments. We’ll admit, it’s 101 Business School rhetoric. So why is it that so few businesses and corporations invest in assets that are outside of their primary industry? Why aren’t more publicly-traded companies derisking their business holdings by investing in things beyond their typical purview?
Enter: AMC Entertainment, Inc. (AMC). As we all know, this Las Vegas-based business owns and distributes television programs through AMC Studios. They don’t have any clear reasons for investing in anything other than cinemas and film production enterprises. Still, AMC filed with the SEC on March 19th to invest a $56 million stake in a Hycroft Nevada gold mine.
“To state the obvious, one would not normally think that a movie theatre company’s core competency includes gold or silver mining," said AMC CEO Adam Aron. "In recent years, however, AMC Entertainment has had enormous success and demonstrated expertise in guiding a company with otherwise valuable assets through a time of severe liquidity challenge, the raising of capital, and strengthening of balance sheets, as well as communicating with individual retail investors.”
While the vast majority of major businesses are hoping to expand their reach and introduce new revenue-generating opportunities using NFTs, AMC has decided to double down on its old-school brick & mortar presence with an investment in gold. Investing in the mining of a valuable asset is almost certainly a smarter long-term play than following the NFT hype. But it’s obvious that AMC has somewhat missed the mark on which type of mineable asset they should focus on.
Why Investing In Bitcoin Miners is the Smartest Asset Diversification Play Out There
In a recent 2022 interview, Bitcoin evangelist and investment strategist Michael Saylor stated that he thinks bitcoin is better than gold and even compared it to oil. According to Saylor, Bitcoin is unique amongst most comparable asset classes as it is mostly free from high inflation, something that has recently sparked an influx in BTC purchasing due to our current economic situation.
“Oil is a great store of value, but you can’t transport $100 million worth of oil in your iPhone,” said Saylor. “What if I told you there was something that had all the properties of gold, was portable, divisible, fungible, scarce, durable…and by the way also happens to be the world’s most efficient payment mechanism? That sounds like an ad for bitcoin, but it’s not. It’s just a description of the attributes of this new thing called bitcoin.”
Let’s be clear, Bitcoin is highly volatile. Sure, it has almost always delivered tremendous year-over-year returns, but there’s an inescapable amount of uncertainty regarding its pricing. That being said, Bitcoin mining has yet to become unprofitable at any point regardless of the fluctuations in BTC’s price. That’s why investing in BTC mining is much more strategically sound than purchasing the cryptocurrency outright or attempting to jump on the trending crypto-train with some new iteration of an NFT play.
There’s a reason AMC didn’t just invest $56 million in gold itself. They invested in a profitable enterprise that mines gold. The same logic can be applied to Bitcoin. It’s entirely possible to “get rich quicker” if you decided to purchase BTC and then sell it during an upswing. On the other hand, you could invest in a longer-term play that truly diversifies and de-risks your business portfolio within a growing industry that has proven to outlive the drastic crypto market price fluctuations.
Think of it this way. We have no concrete idea of how much remaining gold or oil there is within our earth. We do know that there are only 21 million BTC that will ever be mined. According to some estimates, at our current mining rate, we’re expected to mine the last BTC around the year 2140. Yes, it’s entirely possible for BTC to become valueless by that time. But given the current state of this cryptocurrency and the large-scale investments that hundreds of major players have in it, it’s highly unlikely that the price of BTC will ever be less valuable than the hardware and electricity cost it takes to mine it. Regardless of its practical use, BTC has established itself as a scarce asset that has a known limited supply and remains outside of the clutches of the U.S. Federal Treasury Department.
How to Get Started Mining BTC with Crypto Knight Hosting
As of writing this, using a single standard ASIC BTC miner and relying on an average $0.075/kWh electricity rate, you’d be looking at about $20 per day in gross revenue. Based on the average cost of an ASIC miner, you wouldn’t see a positive ROI until about 850 days. This is the reason that every household or building in America isn’t currently mining for Bitcoin. When you go it alone, it’s actually riskier than just buying BTC itself.
That’s where we come into play. Crypto Knight Hosting provides Bitcoin mining solutions for businesses hoping to diversify their assets while minimizing the risk. We have state-of-the-art facilities and industry-leading experts that install, manage, and optimize our miners to perform as efficiently as possible. We also have exceptionally low electricity costs and utilize the most energy-efficient equipment available to ensure high-profit margins with a low ecological impact.
We’ve created the easiest and most approachable solution for any business hoping to enter the Bitcoin mining market. We take care of every single step of the mining process from the point of installation and provide real-time dashboarding so tracking your miners’ performance is only a few finger taps away. You can get started with as low as 50 miners and we provide a full-year contract with a sliding scale electricity rate depending on the number of units purchased.