The operating costs of mining BTC, ETH, and other popular coins have always been high.
However, along with high costs, cryptocurrency mining investors provide themselves with huge income in relative terms. Today we will discuss mining trends in 2021 and their prospects.
The prompt return of bitcoin to the level of $46,000–47,000 after a short drop brought back to life the expectations of the cryptocurrency community to reach the $100,000 milestone by the end of 2021. The negative consequences of China’s attack on mining processes are abating. This is evidenced by both the stabilized hash rate of the network and other indicators showing signs of recovery.
Dependence of the BTC hashing speed on the value
State mechanisms for influencing mining in China also brought about positive dynamics. Thus, the starting points of entry into the mining procedures for the main coins were noticeably reduced, which resulted in profit in relative terms in both bull and bear markets.
Today, Bitcoin and Ethereum mining are some of the few areas that allow you to become the owner of coins without buying them directly on the market. Mining is dominated by large investors who can afford high energy costs and regular equipment maintenance and upgrades.
What if you are not a financial whale or simply do not want to risk big money in an unfamiliar investment space? Here are a few options available to the average investor that allow you to get more BTC and ETH through CEX (centralized exchanges), cloud mining platforms (virtual mining contracts), and cryptocurrency lending services.
Cloud (virtual) mining
The cloud mining procedure is a convenient investment scenario for those who are faced with complex technical aspects as part of the process of mining tokens and coins, do not have access to cheap (or free) electricity, or are limited in terms of spare finance. It is important to note that cloud mining requires very modest initial investments, which means that it is suitable even for experimental investment.
Some of the most well-known cloud mining companies, such as CryptoUniverse, Genesis Mining, and HashShiny 2.0, are currently experiencing regular capacity shortages, which means lucrative Bitcoin and Ether mining contracts in these services are not always available.
Therefore, some users use alternative options for mining ETH and BTC coins as part of cloud mining. One of these services is the Cypriot company Hashmart, most of whose equipment (and therefore computing power) is located in Siberia. Hashmart works in the opposite direction too, allowing the owners of crypto equipment to sell their mining power at a high price.
The service settings allow you to choose different cloud mining tariffs, use the bitcoin and ether mining calculator and calculate the forecast of cloud mining income. As a result, this cloud service allows you to both make money on cryptocurrency mining, and thoroughly and accurately predict your income in accordance with market sentiments.
How much can you earn on cloud mining?
At the moment, using the Hashmart service, you can purchase an annual contract for Bitcoin mining without a service fee (included in the price), as well as unlimited contacts for Bitcoin and Ethereum mining in the cloud (equipment maintenance fee $0.13 Th/day and $0.13 Mh/month respectively).
As you can see from the tariffs above, the minimum investment in cloud mining starts at $25.8, which allows you to minimize risks and painlessly test a new type of investment for yourself.
There is also a demo version of cloud mining in the service. Here the user can study the virtual miner interface and see the entire architecture of mining and reward charging without prior spending.
Finally, the most convenient tool, in our opinion, is the Bitcoin and Ethereum mining calculator. It has to be said, however, that Hashmart so far allows predicting the relative and absolute profit only on a daily and annual basis, depending on the selected tariff, equipment capacity, and the forecast change in the cryptocurrency rate.
With a minimum investment of $25.8, a handling equipment capacity of 300 Gh/s, and a projected Bitcoin rate of $100,000 by September 2022, cloud mining income will be equal to 0.00074761 BTC or $63.79. In relative terms, the payback for cloud mining under such conditions will be 247.2%:
Hashmart cloud mining profitability calculator with an annual contract
Cloud mining: risks and customer reviews
Profit in cloud mining can be calculated differentially in absolute and relative terms. The absolute values may not reflect the required profit even over a long period, which makes mining a high-risk investment method. Also, depending on the established electricity tariffs and constantly changing production protocols that require regular modernization, service costs from the provider may also increase.
However, despite the stated risks, the actual dynamics of the industry’s development have not yet raised concerns: no critical changes in the structure of blockchains are expected, and the rate of cryptocurrencies has been steadily growing in recent years.
In addition, the Hashmart cloud service is transparent and reliable: the user has the opportunity at any time to track the history of mined blocks, which provides a guarantee that the coins were actually mined, and were not obtained by criminal means or simply automatically transferred from the pool storage wallet.
Therefore, unlike combined investment projects, which in most cases are an MLM scam, cloud mining excludes the possibility of a “scam” of its users.
Cryptocurrency deposit and lending services
Cryptocurrency lending, just like cryptocurrency depositing, is a risky traditional option suitable for conservative holders who prefer to receive dividends from deposits.
To understand what dividends to expect, consider the percentage yield (APY, per annum) provided by three popular cryptocurrency lending services — Celsius, BlockFi, and Nexo.
The most attractive numbers are to be found in Celsius (6.23% yield). Nexo’s services are noticeably inferior: they promise to increase your investment by 4.99% per year with a flexible savings deposit. But the annual rate for urgent monthly investments starts at 6.03%. The BlockFi service, which recently issued its own crypto card, is announcing on its homepage revenues of 3.99%, which is a very modest indicator, especially compared to income from investing in Hashmart cloud mining.
BTC Holding Dividends from Deposits on Centralized Exchanges
Several centralized exchanges also offer Bitcoin coin holders short-term deposits, albeit at lower rates than the services mentioned above. However, it should be understood that the trusts CEX exchanges have are by orders of magnitudes higher than those of credit cryptocurrency brokers. This means that the risks of losing funds are much lower.
Binance offers users an APY of 0.52% per annum while Huobi is ready to offer a whopping 1.31%. These values look ridiculous even when compared to traditional bank deposits. Even the offer from the Gemini CEX exchange where users can earn up to 1.66% on their deposits, will in no way entice the spoiled cryptocurrency investors.
The KuCoin exchange offers to set its own daily interest rates and contract duration (7 days, 14 and 28). As a result, users act as independent arbitrageurs of credit offers. As a result, the most unfavorable rate is 1.86% per annum for a seven-day contract, and all interesting offers with an almost guaranteed redemption of the deposit start at 2%.
The question arises: why do market players generally resort to investing free cryptocurrency funds on exchanges when there are profitable cloud mining services?
The answer is simple: when holding coins on an exchange during a bear market, pulling assets from the exchange and losing on commissions is stupid and pointless. Therefore, it is better to resort to services specializing in low-profit short-term returnable deposits and provide yourself with a very small but guaranteed income.
In all other cases, including cases involving investing traditional fiat funds, annual and perpetual contracts from cloud mining services are be much more attractive. Moreover, despite attempts to enter the cryptocurrency mining segment by such large players as state energy corporations, small cloud services like Hashmart and Hashee are (mostly due to optimized marketing and a large and permanent client base) still the most attractive segment for investment with minimal risks.