Mining, Opinion

What to do with Your Bitcoin Mining Profits: Bet on Bitcoin or Play it Safe?

August 12, 2021

It’s no secret that Bitcoin mining can be a highly profitable investment, thanks to its relative consistency, tax benefits, and predictable returns. Mining equipment is typically priced so that it can pay for itself within 12 months of efficient mining; if Bitcoin’s price increases after your hardware is bought, that timeline gets even shorter. However, once you’ve earned Bitcoin, what should you do with it? As a leader in Bitcoin mining farm management and solutions, we’ve taken the liberty of summarizing the different ways that you can manage your profits from Bitcoin mining.

Bank on Rising Bitcoin Prices

Bullish miners often choose to hold their Bitcoin profits in anticipation of rising coin prices. They do this with good reason as many authorities, including Bloomberg in its 2021 Crypto Outlook, have predicted that Bitcoin’s price will reach $100,000 in the near future. Factors driving the digital currency’s imminent boom include major investments from influential firms like Andreessen Horowitz, adoption as legal tender in countries like El Salvador, and increased investment into the currency as a hedge against rising inflation.

1. Play it Safe with Stablecoins

More risk-averse miners often choose to hold their profits in stablecoins, such as USD Coin (USDC) or Tether (USDT), due to price stability. Coinbase recently announced a savings product with a 4% annual percentage yield (APY) on USDC deposits, providing security and modest returns on holdings. While a safe bet, the opportunity cost of a 4% APY is high as your funds could be invested into higher yield assets or even used to generate additional Bitcoin by expanding your mining operation.

2. Reinvest it at the Source

Experienced miners know that reinvesting at the source is the best strategy for compounding your returns. Many miners double down with their mining profits, investing in additional crypto mining equipment and often enjoying significantly higher returns than 4%. Giving you access to premium equipment, competitive hosting, and a world-class mining pool, Wattum is the only partner you’ll need to expand your mining investment as we provide services for every step in the process; you can begin by buying your miners with us and we will support you through hosting and management, allowing you to follow a simple process through a single resource. Thanks to the recent sharp drop in mining difficulty, miners earn Bitcoin at a substantially faster rate than before. Now is the best time in recent memory to be a Bitcoin miner.

However you choose to utilize your yielded Bitcoin, crypto mining is highly versatile and has the potential to be extremely lucrative. For seasoned miners looking for the highest return potential, and the ability to compound returns by expanding their mining portfolio, reinvesting in gears is an avenue that is best explored through an industry expert like Wattum, as the highest returns often present the highest risk. Your investment strategy can be one of these 3 options, or even a combination of them all. When you consider today’s highly attractive mining landscape, it's hard to make a case against the opportunities it presents.

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