Mining, Opinion

Getting the Timing Right When Buying Mining Equipment

June 24, 2021

It’s hard to deny that the case for investing in Bitcoin mining is strong: Bitcoin has rapidly approached ubiquity, mining has proven to be a reliable profit generator, and the depreciability of mining hardware presents attractive tax benefits. For many people interested in capitalizing on this relatively new income source, it’s not a question of “if”, but “when”. In this article, we’ll give you an overview of how to get time on your side when investing in Bitcoin mining, rooted in Wattum’s considerable experience as a leader in mining farm management within the United States.

The Best Time to Buy Bitcoin Miners

As a general rule, equipment should be purchased if the Bitcoin price will likely remain bullish for at least 6-12 months, considering that one Bitcoin miner generates roughly ¼ of a Bitcoin each year. Investors who are able to time it right will see the payoff period of their equipment shorten. With Bitcoin prices predicted by some major institutional investors to hit a colossal milestone of $100,000 by the end of the year, the urgency to purchase mining equipment is high for those hoping to capitalize on future price spikes.

Expect Market Seasonality

It is important to remember that even when coin prices decrease, the market has historically shown that they rebound, often generating a handsome profit for those who have remained patient. Mining can be viewed as a seasonal business that makes significant profits during bull market periods. You may still generate profits during bear seasons, but it can take longer if you still haven’t paid off your initial equipment purchase.

Navigating your Options

The best way to protect your profits if prices take a temporary plunge is by keeping your mining costs lean. Getting affordable hosting below $0.05, as is often available through Wattum’s mining farms, can allow you to survive even the hardest bear market. When Bitcoin fell to $3,500 in 2018, miners with cheap power managed to maintain their payoff schedules and reaped lucrative profits when prices began to climb.

Investors who are particularly risk-averse can always join a mining pool. Mining pools are groups of cryptocurrency miners that combine their computational capabilities to increase their mining output, splitting the rewards. The bigger the pool, the more it wins, giving you the potential for greater profits as wins are shared across participants who have paid a participation fee. Mining on your own is risky with so many pools in action as the joint effort of so many machines will always beat your single rig. Whoever is first to solve a block gets to reap the rewards, which has led to pools reaching such large proportions that nearly 90% of your rewards are likely to be lost without being a pool member. 

Wattum provides access to one of the largest mining pools in the world, alongside a discount of 25% off the initial fee with our partner and global crypto mining service provider, ViaBTC. ViaBTC, as one of the largest pools, is able to ensure more consistent wins compared to pools of a smaller size. This pool is backed by Wattum and ViaBTC’s transparent practices, allowing you to monitor your equipment and returns without needing to worry about unequal profit splitting, ensuring security and peace of mind. Further, ViaBTC provides the Pay Per Share (PPS) payment method, which means you get paid for each valid share that you contribute: straightforward, and will always pay out, regardless of whether or not the pool wins a block or not.

Preserving Your Equipment’s Longevity

In many cases, Bitcoin miners have proven to last longer than their expected useful lives, including Bitmain’s Antminer s9. This miner sold for $900 ($70 per TH/s) at the peak of 2017 when Bitcoin traded at $15,000. When Bitcoin dropped to $3,500 in 2018, used Antiminer s9 units were selling for $150 ($11.50 per TH/s), indicating that mining hardware can be an especially shrewd investment during bear markets. Three years later, the same used machines were selling for $900 once more when Bitcoin began trading at $45,000 and quickly sold out, creating a global market-wide equipment shortage.

While advertised to last only 2-3 years, due to chip degradation and newer equipment release, the Antminer s9s have stood the test of time, working in harsh conditions without any issues even 4 years after their release. The same CPUs used in miners have been observed to last up to 20-30 years in standard computers without failing. With diligent care and management, included in colocation services like Wattum’s, the lifetime of Bitcoin miners can be extended to gain maximum profitability from your investment. Professional installation and server setup creates a secure mining network that maximizes the productivity and long-term profitability of quality mining hardware .

The Time to Buy is Now

As with many forms of investing, there is some advantage to striking at the perfect time with your investment in Bitcoin mining hardware, but waiting too long can cause you to lose out on revenues that can be generated in the meantime. Bitcoin itself has established itself as a bona fide currency, backed by a market capitalization in the hundreds of millions of dollars and adopted by major technology companies and financial institutions. Integral to Bitcoin’s design as the means of verifying transactions, mining is here to stay.

Wattum offers you a vast selection of new and used mining equipment, supported by first-class hosting and management services informed by years of expertise. Ready to start mining? Don’t wait any longer - get in touch with the professionals at Wattum today.

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