The fall in the exchange rate of cryptocurrencies has caused many potential miners to doubt the profitability of mining, and some have formed a clear belief that it is better to forget about mining and crypto in the near future. But are such judgments so fair? Here are five reasons that confirm that mining should be done today.
The cost of equipment is 30-50 lower%
Historically, the profitability of mining and, accordingly, the cost of equipment directly depend on the bitcoin exchange rate. Since there is now a drop in the value of the crypt, the cost of equipment is adjusted down. If you buy mining equipment during drawdowns, then when the rate starts to rise, such a purchase will be extremely profitable, firstly, because the miner will begin to receive greater profitability, and secondly, the cost of the devices themselves will also increase depending on the cost of the course.
Now the situation is unprecedented, the ruble is stronger than ever, which means that the price of equipment in rubles is more than profitable for buyers. But by the end of the year, according to German Gref, the dollar will rise to 70-75 rubles, and prices will rise with it.
The cryptocurrency market, moreover, is in another drawdown, the price of bitcoin has fallen from 64 thousand dollars to 20 thousand. In this regard, mining equipment has also significantly fallen in price, by about 30-50%.
By the way, if we talk about profitability, then in world practice, indicators of more than 3-5% are considered very good. Russians live in a slightly different reality, but even at the current cost of the same bitcoin, you can find mining machines that will pay off in about 2 years. Taking into account the interest rate, the yield from mining will be about 30% per annum – and this is an excellent result.
Mining can be a good source of stable foreign exchange income. In this case, it is formed as follows: the mining machine does not print either rubles or dollars, it produces cryptomonets. These coins are traded on the stock exchange in dollars, specifically in the electronic version of the dollar, and not at the exchange rate of the Central Bank, but slightly higher — by about 10-12%. That is, the benefit in this case is obvious, especially in the current situation. And if the dollar, as Gref promises, grows, then the miner’s income will also grow significantly.
Legislative regulation, mining is also available to legal entities
The law on the legalization of mining is being actively discussed, while many officials and organizations are already in favor, in particular, the Ministry of Finance and even the irreconcilable opponent of cryptocurrency, the Bank of Russia, has already changed its mind. Most likely, mining will be equated to entrepreneurial activity, which means that clear conditions will be developed for it, in particular, on taxation, and specific rules of the game.
People and companies who will enter this business will initially understand what tax restrictions there are in it, what kind of profitability they will be able to get. We can expect that legalization will attract a large amount of money to mining, because with the adoption of the law, the positions of players in this area will be significantly strengthened – they will no longer be in limbo, as it was before.
The cross-border nature of cryptocurrency transfers in the realities of sanctions
Initially, the very essence of cryptocurrency was that its transfers should be independent of third parties, such as banks, payment systems and other regulators. In simple words, one individual can send cryptocurrency to another individual anywhere in the world, bypassing the current obstacles. Such transfers are secure, anonymous and relatively inexpensive due to low fees.
And another very important point is that no one can block transfers in cryptocurrency, this is very relevant at the moment. Fiat money requires the participation of intermediaries in transfers, and each intermediary in the chain is an additional risk of blocking the payment. A cryptocurrency transfer cannot be blocked, only two parties participate in it – the sender and the recipient.
Under the conditions of sanctions, the recognition of cryptocurrencies as a cross-border means of payment can help exporting and importing companies to settle their obligations abroad. Mining is an industry that is able to provide billions of dollars to the country’s economy very quickly and at the same time without budget injections.
New financial instruments: leasing
Leasing is, in fact, not a new financial instrument, but in the field of mining it has just begun its active promotion. Thanks to leasing, mining machines become available to a wide range of people. If earlier only a person with a certain level of wealth could become a miner, since large sums of money were required to purchase equipment at the same time, now even a student or a pensioner can quite afford to purchase a device on leasing terms.
A lease agreement can be concluded for a long term – up to 36 months, whereas installments are usually given only for 3 months, and the term of a bank loan depends on the amount. In addition, not all banks are ready to provide loans for expensive IT equipment. When making a lease, the initial payment is usually only about 20% of the cost, and at the end of the contract period, the equipment becomes fully owned.
In addition, the purchase of equipment for leasing can be beneficial for companies, such transactions allow reducing the tax base for business by 20% for VAT and by 20% for income tax on leasing payments.
Separately, it should be said that there are no problems with mining equipment in Russia now, even despite the sanctions, since most of the major manufacturers and suppliers of it to our market are Chinese companies.
The mining industry will be actively developing in the near future. Even in the case of stricter legislation, mining adapts and may become less profitable in the short term. But in the long run it is one of the fastest growing and most interesting businesses