A bear market is not only a cause for sadness, but also a great time for a detailed analysis. When everything is on the upswing, few people are interested in why - everyone is passionate about calculating profits. When everything is on a downward trend, everyone is looking for the underlying reasons and trying to figure out when it will end, and what will happen next.
At the same time, the across-the-board market fall does not mean that everything is equally bad everywhere. Let's try to figure out if there is something good in the bad, that is, speak the language of money:
- Who is earning even now?
- Where can you earn the most when the market turns around?
- Which promising assets could you choose today, while many market players are demoralized and have lost their touch?
Despite its development, the crypto industry still revolves around Bitcoin. If Bitcoin falls, the vast majority of digital assets fall as well. If Bitcoin grows, so does everything else. During hard times Bitcoin mining remains profitable only for the most efficient companies (Minto’s example clearly confirms this fact).
In the article about the energy efficiency of Bitcoin mining, we examined in detail the issue of mining profitability and its connection with the Bitcoin network difficulty, BTC exchange rate, electricity and mining hardware cost. It is vital to understand that even in the most difficult times, when almost all digital assets holders are suffering losses, effective mining companies continue to earn. Thus, the closer you are to mining, the closer you are to money and further away from losses.
The closer you are to Bitcoin mining, the closer you are to money
By using the ASIC Antminer S19 PRO (110 TH/s, 3250 W, 29.55 kW/TH) model as an example with the help of the HashrateIndex service, we have shown that under current conditions mining on this device is unprofitable at the electricity price of $0.15/kW, while at a price of $0.06/kW it continues to make a profit.
according to HashrateIndex
The charts clearly show how at the price of $0.15/kW (left) the results have already gone into the red, while at $0.06/kW (right) they remain positive. Recall that Minto runs on electricity priced under $0.06/kW.
To an outsider, especially if he is not a big fan of digital assets, it may seem reasonable to follow a more traditional path and, if mining is really that good, invest in shares of mining companies. Not everything is so simple, though.
In the article about large mining companies we have demonstrated that their shares fall much more than Bitcoin itself during unfavorable times, because with each wave of decline, the market believes less and less in the viability of such companies. It is a paradox that these same companies, due to the difficulties they experience, indirectly provoke the further fall of the Bitcoin exchange rate, since they are forced to sell virtually everything they have mined to cover operating costs.
So, in difficult market conditions, mining companies are not suitable to preserve capital. In the article Shares or Tokenized Assets? What is the best way to accumulate Bitcoin? we have put a bold end to this issue.
Large mining companies are not fit to preserve capital
What other ways are there to preserve capital and grow it the most when the market returns to growth? How to begin mining, but minimize the risks? The answer is mining tokens.
What is a mining token?
What are mining tokens (or hashrate tokens)? Each mining company has certain mining capacities and is characterized by its total hashrate. Companies typically use their hashrate exclusively for their own needs, and all Bitcoins mined are the company's income. But there is an alternative.
The company may tokenize its hashrate and offer tokens on the open market. In other words, anyone can buy some mining power in the form of mining tokens and receive mining income from it. Tokens are a highly liquid asset, and mining rewards are paid daily, which is much more profitable and attractive compared to stocks. However, there are pitfalls here too.
The thing is that, as we have already said, not all mining companies are equally effective. And even if a company decides to tokenize its hashrate, it does not mean that its mining will remain profitable in an unfavorable market situation. In the article Why is Minto feeling good when mining tokens are dead? we analyze the cases of such companies in detail and report the payout termination by most of these projects, including well-known ones, such as the BTCST token traded on Binance.
Essentially, infrastructure and access to inexpensive electricity play a key role in Bitcoin mining. When Bitcoin was at its highs, all projects seemed to be winning, companies made profits without analyzing their costs, because the break-even point was somewhere far below. Today everything is different, and it's time to gather stones. In the mining industry, natural selection is as real as anywhere, and only the strongest survives. Minto continues to pay out mining rewards, and also increases its efficiency thanks to an innovative profitability management algorithm that we described in detail in the article How Minto regulates energy consumption in Bitcoin mining.
So, now is a really difficult time, and all assets, including the Minto token, Bitcoin and mining revenue, are falling. At the same time, the Bitcoin network difficulty continues to grow (provoked by the agony of the large mining companies, which, in order to survive, are forced to buy more and more mining hardware and increase their hashrate). This further reduces the value of each terahash of mining hardware since the income it brings keeps decreasing. That’s why the price of mining hardware is also falling, with the price of mining tokens in tow.
Despite the fall, the BTCMT token generates income in Bitcoins
As you can see, everything in this market is interconnected, and Minto token is no exception. The chart below shows a very indicative dynamics of the decline in the prices of Bitcoin, the BTCMT token, the price of one terahash for the most efficient miners with energy efficiency under 38 kW /TH and for 38-68 kW /TH miners (those that can ensure the mining profitability in the current market conditions):
according to Hahrateindex and Dextools
However, Minto tokens, unlike many other falling assets, have one very important advantage. Despite the fall, the BTCMT token generates income in Bitcoins. On the chart, this cumulative income is schematically represented in the form of the only upward green curve (Minto BTC rewards). This is your “green candle” in a long line of red. No matter how deep the decline of Bitcoin and its correlated assets is, Minto allows you to accumulate Bitcoins daily.
When the market turns around and goes up, mining hardware prices will begin to grow rapidly, and after them, the Minto token’s price will begin to rise. Not only tokens will grow, though, but the very Bitcoins that you earned with Minto’s in difficult times, too. At the same time, your mining income will also increase. The market is cyclical, the blues are not eternal, and you need to look to the future and see the opportunities and potential of the current situation!
A lot of people would love everything to grow 5-10 times, and to experience the emotions of the past years again. This will undoubtedly happen more than once, but for strong growth you always need to survive a pullback. For impatient players, the whole market boils down to a “to-the-moon” concept: if it is there, fine, if not, it's a disaster. However, “to-the-moon” is only the tip of the iceberg, and in order to meet it fully armed and make it a reality, you need to prepare well. Now is the best time!
Join Minto, the only mining token that continues to work!
Join Minto, the only mining token that continues to work and generate profits despite the market situation! We make a profit regardless of the circumstances as a result of our everyday work, and we will continue to do it both in sorrow and in joy. Remember the invariable “Minto green candle” in your crypto wallet, and do not forget that when the market starts to grow, you will already have enough Bitcoins to meet the “to-the-moon” on high alert!