Buying Bitcoin or Bitcoin Mining Investing: A Bear Market Comparison
When buying bitcoin, you use a centralized or decentralized exchange to buy the Bitcoin, which you then own and can store in a Bitcoin wallet or on an exchange. The value of this Bitcoin is directly influenced by the price of Bitcoin, if the price of bitcoin goes up, so does the value of your bitcoin (the same when it goes down).
When investing in a Bitcoin mining company, you do not directly own any Bitcoin. You could either own machines that mine the Bitcoin or shares in the company that mines the Bitcoin; therefore, the value of your investment is not directly tied to the price of Bitcoin, although it will be indirectly tied (since the Bitcoin mined is the direct profit of the operation).
If you own shares in a company, you also own part of the company. This means there are underlying assets that could have value in the company apart from Bitcoin. This can include:
- Machines, real estate, hardware and other assets
- Proprietary technology, such as immersion mining
- Other aspects of the business, such as data center services revenue.
By having these assets on a company’s balance sheet, it potentially mitigates some of the risk of buying Bitcoin directly since there are no possibly mitigating assets, should the price of Bitcoin decrease.
Self-mining Versus Investing in a Crypto Company
When talking about mining versus buying Bitcoin, there is also a difference between self-mining the Bitcoin or investing in an established Bitcoin mining company. When mining Bitcoin yourself, you will have to purchase the machines to mine, set up and maintain the machines, create the correct electrical infrastructure and pay the electricity costs. The end goal is to be rewarded with the Bitcoin that the machine is mining.
Self-mining is similar to directly buying Bitcoin. You can calculate how much Bitcoin a machine can approximately mine before buying it, which allows you to calculate if it’s more beneficial in your specific case to self-mine or directly buy the Bitcoin.
The main difference between self-mining and investing in an established Bitcoin mining company is that the established company will do the mining for you. Such an investment will give you access to Bitcoin mining at a large scale. This could also mean better deals to acquire mining hardware, better electrical infrastructure, the expertise to maintain miners and, potentially, better electricity prices than any retail rates. A possible downside to investing in such a company is that the reward for investing is shares of common stock and not Bitcoin, directly.
However, in most cases, the main goal of purchasing Bitcoin is for the underlying asset to increase in value. As long as the underlying value of the mining company grows, investing is similar. Even if the price of Bitcoin fluctuates, the company can continue to grow and expand.
Why Elite Mining Inc
As also seen in this article, a bear market could provide interesting opportunities for investing in the crypto industry. Although there are several methods to invest in Bitcoin, investing in a Bitcoin mining company could offer great advantages, should the market recover, while potentially offering sustainability, flexibility and risk mitigation.
In this article, you can read why investing in a Bitcoin mining company in a bear market is the perfect opportunity. In short, a bear market lowers the hardware prices of miners, significantly reducing the cost to start mining, especially if the infrastructure for large scale mining is already available. A bear market might also push the prices of Bitcoin to a point where it’s unprofitable for some miners to continue to mine, which could result in those miners shutting down. When miners shut down, the network difficulty of the Bitcoin network goes down, which is good for the miners that are still mining. This has the potential to provide an increase in BTC mined for the same hashrate.
- Read how the Bitcoin mining network difficulty dropped recently.
So, why Elite Mining Inc?
EMI is in a unique position in the market, allowing us to offer an interesting investment opportunity.
- EMI mines Bitcoin. As explained by this article, companies like ours could offer a potentially beneficial way to invest in Bitcoin.
- EMI is diversified. EMI not only mines Bitcoin, but we can also mine other cryptocurrencies. EMI hosts mining machines for partners and clients. EMI has a subsidiary called EMU that makes mobile units for mining and proprietary immersion mining pods. EMI is also ever-expanding and looking into new services and revenue streams.
- EMI uses proprietary immersion technology. This allows overclocking of machines and a long machine lifespan, which could significantly increase profit margins when Bitcoin prices go up (compared to regular air mining). Plus, we get longer machine lifespans, which enables longer mining operations.
But why invest now?
Due to the current market conditions, now could be the perfect time to invest.
Prices are low and there is uncertainty in the market. Hardware prices are significantly lower than they were in better market conditions. If you couple this with the possible reduction in mining difficulty, which could potentially increase the amount of BTC mined, now is the time to expand.
Additionally, expansion takes time. Expanding large scale mining operations isn’t done in a few days. Acting now, which we’re doing at EMI, ensures we’re positioned well when the market recovers. Through EMI’s immersion mining technology, miner lifespan is also significantly increased, making these arguments even more beneficial over the long run.
Interested in investing in Bitcoin mining?
Contact us today at elitemininginc.com/contact-us/. There’s no better time than now to get started.
Disclaimer: This content is for educational purposes only, and is not intended to be financial advice. Please consult with a certified financial advisor before making any investment decisions. Investment in any company, security or cryptocurrency involves risk. Prices change, sometimes dramatically, and you can lose some or all of your money.