Research by Hashrate Index suggests that buying Bitcoin is preferable to mining it in most circumstances. The analysis found that miners will likely incur a loss even in optimistic Bitcoin price projections, due to the introduction of more efficient machines in the market. However, owning Bitcoin miners only makes most sense right before parabolic bullish periods, with direct Bitcoin purchases being more profitable at all other times.
Key points:
– Mining Bitcoin may appear highly profitable, but research suggests otherwise.
– Mining is a dynamic business where miners usually get outdated within five years due to the introduction of more efficient machines in the market.
– Bitcoin miners are profitable only if they can recoup 100% of their capital spent in buying the machines, excluding operational costs.
– Hashrate Index’s analysts found that miners will return north of 1 BTC only in the most bullish scenarios, where Bitcoin price goes on to $500,000 per token by 2028, while the network’s hashrate grows 10% slower than its price.
– River Financial’s analysts found that in the last five years, owning miners was preferred 53.6% of the time.
– Both reports agree that owning Bitcoin miners only makes most sense right before parabolic bullish periods, with direct Bitcoin purchases being more profitable at all other times.
