There's no way around the fact that we're experiencing a crypto-winter and a bear market economy in general. With the price of BTC dropping to around $20,000, will mining this cryptocurrency still remain profitable? The answer appears to be yes, provided that miners can keep their electricity costs at or below 6 cents for every kilowatt-hour (kWh). With the newest ASIC miners, state-of-the-art facilities, and 24/7 analysis & management of mining operations, turning a profit while mining BTC remains wholly achievable even during the current economic tightening.
We’ve Been Through This Before
At the time of publication (06/29/22) the price of Bitcoin has fallen to $20,062.18. That’s a pretty sizeable decline from the highs of earlier this year, but it’s actually only a 43% dip from June 2021. For comparison, the S&P 500 is currently down about 20% year-to-date and it’s supposed to be one of the safest stock market investments out there.
If we can remember way back to December of 2017, Bitcoin hit an all-time high of nearly $20k before steadily plummeting to around $4k exactly a year later. It took another two years for BTC to surpass its previous record high in December of 2020. As most of us know, the following year gave rise to Bitcoin’s current all-time high of roughly $69,000.
All of this is to say that we’ve experienced bear markets and crypto-winters in the past and so far, none of them have lasted more than a year before the bulls began to show their horns. Sure, fears over an economic recession and dips in NTF profitability have created some major ripples throughout the realm of cryptocurrency & DeFi. That being said, we’ve seen very similar market conditions before, coupled with mainstream media and analysts touting a definitive end to the dominance of BTC as a whole. They were wrong then, so who’s to say they won’t be wrong again?
Time to Capitalize On the Bear Market?
That brings us to our main point. As long as mining BTC remains profitable, even if that net profitability margin is low, it still makes perfect sense as a longer-term investment. In fact, it’s one of the least risky ways that you can capitalize on the current bear market while preparing for the next upswing. Of course, no one can say for certain how low the price of BTC will fall, but we can intuit that a mass exodus within the Bitcoin mining industry will lead to lower hash rates, making it easier to accumulate more of the father of all cryptocurrencies.
Basically, rather than simply buying low and selling high, you could invest in BTC mining while prices and hash rates are down while still maintaining profitability. If history tells us anything, winters don’t last forever, and those that get in at the right time tend to be ones who rely on historical trends, logic, and patience rather than panic & anxiety surrounding the current market conditions. There’s no way of telling where the market will go. All we have to rely on is historical data that consistently points to periods of cooling right before things turn red hot.
How Can BTC Mining Remain Profitable?
It all comes down to efficiency. Right now, with the latest mining technology available and professionally managed facilities, Bitcoin mining operations can maintain profitability provided that they hit a certain cost per kilowatt-hour threshold. That threshold is currently evaluated to be around 6 cents per kWh.
Still, the important thing to keep in mind here is that investments like stocks or cryptocurrencies move up and down every day. Even if there is a multiple-month period where the price of BTC drops 50% or lower, the likely outcome will be another migration away from the mining industry, leading to lower hash rates and ultimately greater efficiency in terms of electricity costs. And, investing in BTC mining should be viewed as almost the exact opposite of day-trading. You aren’t trying to constantly buy low and sell high, but rather invest in an asset that we have seen fall and rise astronomically time and time again.
In any case, to answer the question above, Bitcoin mining will remain profitable with the right equipment, facilities, expert maintenance and analysis, and below-average electricity costs. Fortunately, Crypto Knight Hosting checks all of those boxes. We offer state-of-the-art facilities, industry-leading ASIC miners, professional support with real-time dashboarding, and state-supported energy contracts that keep our costs low enough to maintain profitability throughout this frigid crypto-winter.
So, while it might remain cold for a while out there, we all know that things tend to get hot again eventually. We know that bear markets and crypto-winters don’t last very long. We know that there have historically been tremendous upticks in prices almost immediately after the huge dips that we’re seeing. And, we know that mining BTC is the smartest and most efficient strategy for entering this market and capitalizing on conditions that will have most people scared at the moment, and then feeling severe FOMO only months from now.