As we know the cryptocurrency had a huge rise in value and popularity during the time period up until 2018 when bitcoin experienced the biggest market crash it had ever had. But we also know that history repeats itself and would this promise that the bitcoin or any other currency could rise to the peak that bitcoin had set?
Something like this had already happened to bitcoin once when in 2013 it reached its all-time high of $1150 and in 2 years’ time experienced its all-time low at $183 in 2015. The surprising part is that some people made a fortune by mining in the bear market. But now it is 2019 and the question is if mining is still profitable nowadays and if you should mine when the BTC price is up or when it is down.
The difficulty of mining LTC in December of 2014 was 52190 while in October it was 51699. The mining difficulty has not varied much over the time span of 2 years, which is regarded as the last bear market. Knowing that the equipment that was used to mine then and can be used now increases the amount of LTC you can mine in the bear market by providing a high hash rate. This gives us an overall glimpse of the market applicable to different cryptocurrencies. As we know, bitcoin is the most popular type of cryptocurrency and if you are a true believer in blockchain in the future all you should do is collect as many bitcoin as you can.
Why Should You Mine In The Bear Market?
- Mining rigs decrease in price as BTC decreases in price because the supply of mining rigs surpasses the demand, whilst the profit that miners earn depends on the conversion to a centralized currency like the US dollars. Only reducing the cost of buying mining rigs already reduces the time to pay back. As an extra, coupons could get distributed making it viable to purchase mining rigs in a bear market.
- Mining difficulty is also a huge factor that affects the pay rate. The interest in mining in the bear market is low which means that the BTC network hash rate increasing speed will reduce which will allow users to mine at the easier difficulty for longer periods of time.
- When the bull market comes miners are able to sell their mined BTC for a huge profit and the mining rigs that you bought at the time of the bear market will also increase in price.
Comparison Between Bull Market And Bear Market
In the image, it is possible to see the comparison between 2 types of miners during the period of the bull market. As it is possible to see, the payback rate during the bull market period would be around 1 year but this number can be even lower depending on the tax and electricity cost in the region where you plan to do the mining. Also, this table shows that newer miners can mine over double the amount of BTC per day at almost the same mining rig price as old mining rigs.
If a cryptocurrency is in a bear market period then it might be the time for you to start mining to make huge profits when it enters back into the bull market.
But if you do not want to buy mining rigs and worry about paying extra in your electricity bill you can resort to Cloud Mining.
Cloud Mining
Cloud mining is a service that could get offered by a remote place mining rig farm. It allows users to buy a certain amount of mining capacity whilst avoiding the problems of buying and storing mining rigs and paying for electricity that is used by the mining.
Why Cloud Mining?
Compared to buying mining setups and maintaining themselves by buying cloud mining services the user can avoid having to worry about maintaining the mining rig whilst also having low-cost electricity resources maximizing the amount of profit generated and reducing the time it takes to manage stuff.
If you take a look at this mining contract offered by ROCK MINER, you can see that by paying $1995 you will be able to earn around $10 daily and that amount can be bigger.
Cloud Mining Over Buying Cryptocurrency
- If you decide to buy cryptocurrency there are way more things you need to do. You would need to sign up to a cryptocurrency exchange website, find out if the website is legit and will not scam you, and then find a stable coin that you will need to purchase with regular money first which can impose taxes and fees, but with cloud mining, all you need to do is sign up to a website which offers cloud mining services and select the right plan for you and pay. It is as easy as that.
- It is not easy to become a coin holder because the crypto market can experience extreme volatility and most of the holders will buy or sell their savings with price fluctuations. In the common situation, the price of the coin will also increase when people start selling it and will decrease when it is being just stockpiled and not used. This causes traders to often lose money in this type of market.
Conclusion
In conclusion, we could probably agree that the most appealing way of making a profit would be by using cloud mining services because they remove fluctuating mining rig prices, the hassle of maintaining the mining rigs, and varying electricity prices. This could possibly be the way how to mine crypto in the future.
