Bitcoin mining has been a popular activity among the middle class looking for a way to invest in cryptocurrency. However, recently it is considered that the mining of bitcoins at home for the middle class is going to leave out many who even know about how it works, and that soon it may be too late to start, so there will only be room for big players with a lot of capital.
The reason behind this is the upcoming halving event expected in 2024, which will halve the number of new bitcoins that can be created. Historically, this event has been a time of great volatility in the cryptocurrency market, leading to an increase in demand for mining hardware and therefore a shortage in the market and an increase in mining prices. mining equipment.
Although there are several factors that influence the cost of mining Bitcoins, including the cost of energy and the foreign exchange market, infrastructure is a critical element, since it affects the efficiency and profitability of the mining process.
In particular, the prices of ASIC equipment, which are required for bitcoin mining, are expected to rise significantly after the halving. This is because the price of ASICs is largely determined by their profitability, that is, by the amount of bitcoins they can generate relative to their cost and power consumption. When the price of bitcoin increases, the profitability of mining also increases, and as a result, the prices of ASICs (miners) tend to increase due to the high demand in the market.
During periods of rising bitcoin prices, ASICs often become a rare commodity and their price skyrockets due to high demand in the market. This situation makes home bitcoin mining less and less accessible to the middle class, who may not have the financial resources to invest in expensive equipment.
In addition, the price of ASICs is also influenced by the price of bitcoin in dollars. When the price of bitcoin goes up in dollar terms, mining profitability also goes up in dollar terms, making ASICs more profitable. Consequently, the prices of ASICs tend to increase even more.
Although some argue that home-based bitcoin mining remains profitable even after the halving, the accessibility of mining for the middle class is likely to become increasingly reduced. The growing demand and rising prices of ASICs are directly related to the proximity of the next halving, as the days go by the market generates greater expectations.
While investing in bitcoin mining can be expensive and risky, those interested in entering the market can find significant investment opportunities if they act quickly. As the price of bitcoin continues to increase, the price of ASICs will continue to increase to maintain their profitability.
This means that middle-class investors who want to enter the bitcoin mining market must do so now or face the possibility of waiting several years for the bear market to hit again and they can access it. Even so, the floor price of the equipment will be much higher than now, taking into account the trend in the behavior of Bitcoin as each of its Halvings happened.
*By houseHe, Bitcoiner and co-founder of South American Miners (SAM).
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