As Bitcoin’s price approaches its historical peak, optimism is growing among investors about the future of the market. However, Bitcoin mining has also become increasingly challenging, with the latest difficulty adjustment pushing mining difficulty to a record high of 101.65T. This intensifies the competition for miners.
Should Bitcoin prices continue to rise, the introduction of new mining equipment and the influx of additional hash power will further increase mining difficulty.
Despite this, Bitcoin mining still offers highly attractive returns compared to traditional industries. However, as the industry matures, the days of easily capturing high profits are over.
Today, maximizing profitability requires more sophisticated management strategies. In the current market climate, the conventional “mine-withdraw-sell” approach no longer ensures efficient capital utilization. Miners need new tools to optimize their earnings fully.
Today, financial tools in the crypto market have matured considerably. Large-scale miners often hedge their positions using options, but these instruments are complex and have high barriers to entry, making them less accessible for small and medium-sized miners.
Fortunately, some mining pools now provide similar financial services, enabling miners to maximize their returns more easily.
How Crypto Loans Can Amplify Returns
Crypto loans are a highly effective tool during a bull market. Miners can use the BTC in their accounts as collateral to borrow USDT through ViaBTC to cover operational expenses like electricity bills and miner maintenance.
When BTC’s price reaches a target level, miners can sell the collateralized BTC in ViaBTC, using part of the proceeds to repay the loan while retaining the remainder as profit.
For instance, suppose BTC is currently priced at 70,000 USDT, and a miner has 1 BTC in their account. Expecting the price to climb to 100,000 USDT, they want to hold off on selling. However, they urgently need cash for day-to-day expenses.
In this scenario, they can use ViaBTC’s crypto loans feature to use their 1 BTC as collateral and borrow 42,000 USDT. These loans have no fixed repayment date, giving miners the flexibility to repay or sell the collateralized BTC based on market conditions.
Sixty days later, if BTC reaches 100,000 USDT as expected, the miner can sell the collateralized BTC, repay the 42,000 USDT loan along with interest, and gain nearly 58,000 USDT in profit.
This example illustrates that without using the crypto loans tool and instead selling BTC prematurely, the miner would have missed out on the additional profit from BTC’s increase from 70,000 USDT to 100,000 USDT.
How Hedging Service Can Protect Profits
Hedging service is a useful tool for miners to lock in profits ahead of time and mitigate market risks. In a global market filled with uncertainties, unexpected “black swan” events can cause sharp price declines, impacting mining income.
In such situations, hedging service helps ensure stable earnings.
For example, when BTC is priced at 70,000 USDT, a miner may believe this is likely the peak for the next two months, with an uncertain outlook ahead.
To secure their returns, they decide to sell their mining output for the next two months at the current price.
The miner can apply for a hedging service through ViaBTC, where the mining pool estimates their daily output at approximately 0.01 BTC based on the current hashrate, setting their maximum hedging limit at 1.8 BTC for 180 days.
Alternatively, the miner can choose to lock in the output for the next 60 days, amounting to 0.6 BTC.
When first engaging in hedging, the miner must deposit 1/6 of the hedging amount as collateral, which in this case means pledging 0.1 BTC to secure a hedge of 0.6 BTC.
They can then sell it at the current market price of 70,000 USDT, receiving 42,000 USDT. These funds are temporarily held in the miner’s hedging account and gradually released as their daily mining output is generated until the end of the hedging period.
Sixty days later, if BTC drops to 50,000 USDT, the value of 0.6 BTC would have fallen to just 30,000 USDT without hedging. B
y using the hedging service, the miner locked in 42,000 USDT, effectively securing an additional profit of around 12,000 USDT.
ViaBTC mining pool offers both crypto loans and hedging service that are practical and easy to access.
If you aim to maximize returns during a bull market, crypto loans are ideal. If you prefer to lock in profits at current market rates, hedging service is the way to manage risk.
Effectively combining these tools can help miners achieve the best possible outcomes in any market condition: https://www.viabtc.com/
Disclaimer: This is a paid post and should not be treated as news/advice.
