Crypto-winter has been the buzzword for the cryptocurrency market over the past year and a half. Bitcoin’s [BTC] price fall from its all-time high in December 2017 pulled down not only the prices of other altcoins, but also the value of the collective cryptocurrency market. While analysts are apprehensive about claiming that the crypto-winter is over, contrary to popular perception, mining remains profitable for many.
According to a Quarterly report on cryptocurrency mining released by Token Insight, ASIC mining remains a profitable business, despite bearish market trends. Taking the Chinese market as its primary dataset, the report considered a variety of factors such as mining difficulties, type and price of equipment used, and energy consumed, to conclude that mining is more cost-effective and profitable than buying Bitcoin.
This finding was also supported by economist Alex Kruger, who recently tweeted about Bitcoin mining’s breakeven cost. According to him, mining’s breakeven cost is $3,550. If this breakeven cost is considered to be correct, then BTC’s current trading price ($5,262, at press time) ensures a profit of over $1,500, for every Bitcoin mined.
The report specifically highlighted Cloud mining services, which it claimed offered a return of 10 percent and promised to be a better option than simply purchasing the coin. Further, the report also claimed that an increasing number of cloud mining services was making the industry more accessible since it was lowering the investment threshold required to enter the crypto-mining business.
Token Insight’s report into cryptocurrency mining is contrary to months of reports which stated that crypto-mining pools, especially the ones in China, were going out of business. In fact, not just mining pools, but reports suggested that mining manufacturers such as Bitmain were having a torrid time making a profit on their mining equipment as well.
Some reports had even alleged that the mining giant was nearing insolvency and Twitter was buzzing with rumors that its reserves were running on fumes and that the company was desperately trying to raise new money. With the release of its new Antminer S17 mining equipment, Bitmain hopes to change its fortune for the better.
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