Bitcoin breaks through $40,000 for the first time. Should we start mining?

Source: Lieyun Finance

Taking stock of the performance of various asset classes in 2020, Bitcoin's rise can be described as "far ahead of the rest" : the S&P 500 index's annual cumulative increase was about 16.3%, spot gold was about 25%, and silver was about 48%... and Bitcoin ended 2020 with the most dazzling end with an annual cumulative increase of nearly 300%.

Not only that, Bitcoin continues to rise amid fluctuations. As of 15:00 on January 8, 2021, the trading price of Bitcoin was as high as 38,000 US dollars, with a total market value of 710 billion US dollars. On January 8, it even broke through 40,000 US dollars and successfully became a hot search.

As the price of Bitcoin soars, apart from Bitcoin holders, friends in the mining circle are the ones who find it hardest to hide their joy.

"The market is picking up now!" During a brief exchange with the mine owner Brother Wang, Lieyun Finance found that Brother Wang mentioned the market many times, and his words revealed excitement and excitement.

According to Brother Wang, his newly built mine is currently busy connecting electricity. Affected by the market conditions, attracting investment is not a problem. The situation of oversupply in mines that everyone talked about before is also quietly changing.

Some miner friends in the community also admitted that this winter is very warm, and the S9 mining machine that was previously shut down can still generate good profits for him.

Retired "king of aircraft" is reborn

The Antminer S9 was born in the last bull market. It was snapped up as soon as it was launched, and the price once reached more than 20,000 yuan. However, as time went by, with the sudden increase in computing power and the increase in mining difficulty, the S9 mining machine has already fallen to the level of 100 yuan, and no one is even interested in it. However, with the recent record highs in the price of Bitcoin, this retired "king of machines" has been reborn.

We take the bitcoin price of 38,000 US dollars as an example. If the electricity price is 0.35 yuan/kWh, the current daily output value of the Antminer S9 mining machine is about 26 yuan, and the daily net profit is about 14 yuan. Even if the price of this model soars to 1,000 yuan, the payback period will only take more than two months.

In fact, it is not only the miners who own S9 mining machines who are warm this winter. Those who own Shemma M30S++, Ant S19Pro and other models are also very happy making money.

According to the data from F2Pool, when Bitcoin was about 38,000 US dollars, Shenma M30S++, Ant S19Pro, and Shenma M30S+ ranked in the top three, with daily net income exceeding 150 yuan, 177.1 yuan, 175.18 yuan, and 155.8 yuan respectively. There are more than 20 models with daily net income exceeding 100 yuan. It is a bit exaggerated to say that all machines that can run are printing a lot of money, the only difference is how much they print.

Mining machine revenue data (Source: F2Pool official website)

According to QKL123 data, on January 8, the total Bitcoin network hashrate was 149.34E, up about 42% from the same period last year. The current total network mining difficulty is 18.6T, and according to forecasts, on January 9, the Bitcoin mining difficulty will increase by 10.9%.

Changes in the difficulty of the entire network’s computing power (Source: QKL123)

Regarding the computing power situation, Liu Yang, marketing partner of BitExpress, told Lieyun Finance that the overall computing power will continue to grow .

She explained: " First, manufacturers have launched new machines one after another. Second, if the price of the currency continues at this level, many old machines will also be turned on, and new mining farms are being built and powered on. However, the increase in the dry season will not be too fast. Many old models with high power consumption have no plans to be turned on before the price of the currency rises sharply. During the dry season, many mining farms only recruit machines below 65W/T. However, in the flood season, if the price of the currency continues at the current level, the S9, T2T and other "fighters" may continue to be turned on and run."

With the market rising, are mining opportunities in short supply?

Although the difficulty of mining will increase in the future, it is a blessing to have a mining machine at home now, because it can be said that you can make money without doing anything. Compared with 2018, it is a world of difference. At that time, stories of people being forced to leave the market due to being unable to hold on were constantly staged, and mining was just a lonely process.

In 2018, the price of Bitcoin fell from $20,000 to $3,000, and its market value dropped by 85%. Mining machines were once sold in large quantities at the price of scrap metal, and losses and even bankruptcy became the norm in the mining industry. Even the mining machine stores in Shenzhen Huaqiangbei SEG Plaza, the most active global mining machine distribution center, were almost completely closed or changed. In addition, Sichuan and Inner Mongolia have repeatedly carried out campaigns to centrally regulate mining sites.

The mining industry was in a dark cloud, and miners experienced an industry winter that was unforgettable for everyone. It was not until the market gradually warmed up in 2019 that everyone gradually recovered.

In fact, the real game is a contest of capital strength. Under the extreme circumstances at that time, miners without capital strength had to leave the market. However , mining tycoons with capital strength not only did not leave the market, but also adhered to the principle of "entering the market when others leave the market" and acquired a lot of mining machines. Today, some mining tycoons have experienced that round of bloody industry reshuffle and finally ushered in today's sunshine.

2016 Huaqiangbei Ant S9 advertisement (Source: Internet)

Manager Li of the mining machine stall in Shenzhen SEG Plaza used to be in the computer accessories business, but he started selling mining machines in 2016. He told Lieyun Finance that the mining machine business was particularly difficult in 2018, and he watched stalls close or change business one after another. Fortunately, he had some old customers and his own mining farm, so he persisted.

Today, he adopts the strategy of coordinated online sales and offline stores, that is, promotion in WeChat communities and Moments + inspection and communication in offline stores, and continues to do the business of selling mining machines and computing power.

He admitted that although the market has risen, more people are waiting and watching . The more the market rises, the more people dare not buy, for fear of buying at a high price. At present, the main customers of mining machine sales are old customers.

Some miner friends also told Lieyun Finance that the current machine prices are at a high point and it is not suitable to enter the market for mining. The subsequent development depends on the market trend. If there is an extreme decline in the market, it will be very unfavorable. Everyone is now using financial means, such as hedging, to guarantee mining income for at least half a year.

Will the March 12 incident happen again?

Recently, there have been many news reports about big capitals entering the market to buy Bitcoin, such as MicroStrategy, PayPal, and Grayscale, which have invested hundreds of millions of dollars in Bitcoin. However, the biggest news in the mining industry is that Marathon Patent Group announced that it has completed a $200 million fundraising to pay for the final payment of mining machines and expand its business. Among them, $170 million was used to purchase 70,000 Antminer S19s from Bitmain.

Compared with the direct purchase of Bitcoin by large capital, the capital layout of mining seems to be smaller. Industry insiders said that on the one hand, it is because the nature of mining layout requires a relatively low profile, and on the other hand, many large capitals have already completed the layout.

So, for ordinary investors, are there any opportunities for mining layout?

The industry insider said that mining is a capital-intensive game. As traditional capital enters the mining industry in a low-key manner through various forms, investors can no longer play this business without tens of millions of dollars. Therefore, joint mining and cloud computing power may be the last way for ordinary investors to participate in it, but they must be carefully identified to avoid falling into the trap.

Brother Peng from Sichuan told Lieyun Finance that friends who have the conditions can also become "porters" who are not easy to enter the mining industry, because the development of the mining industry is also deriving many businesses. For example, earning the difference by selling bare electricity.

Bitcoin market trend today (Source: QKL123)

Regarding the future development of the mining industry, Brother Peng said that it mainly depends on the market conditions .

On the evening of January 7, Jiang Zhuoer said that the current Bitcoin market is rising too fast and a bit exaggerated, but the bull market will at least last for the whole year of 2021, and the peak of the bull market may be in the first half of 2022. In addition, Jiang Zhuoer also emphasized that he did not know what would happen in the middle. But he believed that the March 12 incident might happen again , and Bitcoin would fall by 50% within 24 hours. Investors still need to pay attention to risks.

What do you think about the future trend of the coin price? In the current market, will you join the mining? Welcome to leave me a message!