No hardware, no problem! 3 ways to earn Bitcoin through cloud mining and staking

[ad_1]

The rapid recovery of Bitcoin (BTC) above $ 46,000 has renewed calls for a BTC price of $ 100,000 by the end of 2021, as the effects of the Chinese crackdown on the mining industry slowly begin to fade as the Bitcoin network hash rate shows signs of recovery.

Bitcoin means the hash rate over the price. Source: Glassnode

One of the side benefits of the Chinese crackdown is that it has lowered barriers to entry into the Bitcoin mining space, which has proven to generate profits in both bull and bear markets.

Bitcoin mining is one of the few ways that investors can acquire BTC without buying it directly from the market, and is quickly becoming an industry dominated by large interests who can afford the costs of electricity and maintenance required to manage a mining operation.

Here are some options available for the average cryptocurrency stacker to acquire more BTC through cloud mining contracts, cryptocurrency lending platforms, and centralized exchanges (CEX).

Cloud mining contracts

The cloud mining industry has been around since the early days of Bitcoin, and it offers those interested in Bitcoin mining who lack the space, equipment, and electricity to outsource their production.

Some of the more well-known companies that offered cloud mining services included Genesis Mining and HashNest, but the demand for their services exceeded their capacity, resulting in the sale of all their Bitcoin mining contracts.

One of the current mining operators with available contracts is Shamining, a UK-based company that has been in business since 2018, and claims to have data centers around the world with locations in California, Mexico, Cape Town. , South Africa and London, England. .

Through this service, users can rent mining equipment and pay the costs associated with operating the units, while the company takes care of physical housing, operations and maintenance. Once operational, the generated product can be withdrawn to a user-specified Bitcoin wallet.

Current leases include two options for GPU miners, which cost around $ 283 for 23,580 gigahashes per second (GH / s) or $ 1,066 for 94,340 GH / s, and another option for ASIC miners with a current cost of $ 2,571 for 235,849 GH / s of mining power.

All contracts indicate that they have a profitability that starts at 143%.

Another option that gives users more flexibility regarding the parameters of their mining contract is ECOS, a free economic zone company located in Hrazdan, Armenia, and in operation since 2017.

ECOS cloud mining profitability calculator. Source: ECO

As shown in the graph above, a 50 month contract for 9 terahashes per second currently costs $ 1,668 and is expected to generate a profit of 272.82% at a BTC price of $ 70,000.

It should be noted that all cloud mining services offer warnings about the high risks involved and no level of profit can be guaranteed. This could be due to various circumstances including fluctuating electricity prices, volatility in Bitcoin prices, and advancements in mining technology leading to a substantial increase in mining difficulties, making equipment older. obsolete.

Related: Bitcoin Mining Difficulty Hops A Second Time As Miners Settle Off

Crypto loan services

A more traditional option available for hodlers to acquire more Bitcoin using their current stack that does not require additional investment, such as mining, is to use loan services that offer a return on deposits.

Nexo and Celsius are two of the most well-known lending platforms that allow cryptocurrency users to borrow funds against their crypto holdings or earn rewards for their deposits.

At the time of writing, Celsius offers users an annual percentage return (APY) of 6.2% for Bitcoin deposits, and Nexo offers a standard 5% return on flexible term deposits, while term deposits fixed for a minimum of one month can earn 6%.

A third option that offers users a 4% return on BTC deposits is BlockFi, a crypto asset service provider that offers interest accounts and crypto-backed loans and has also recently launched a card. bitcoin reward credit.

Related: Which Bear Market? Investors throw record amount behind blockchain companies in 2021

Earn BTC from centralized exchanges

Several centralized exchanges also offer Bitcoin holders a return on their BTC deposits, albeit at lower rates than mentioned above.

Binance, the largest CEX in the crypto ecosystem, offers users an estimated APY of 0.5%, while the third Huobi exchange offers 1.32%.

The best return offered on a US based CEX can be found on Gemini where users can earn 1.65% on their deposits.

KuCoin offers a freer approach to the BTC loan market where lenders can set parameters for loan terms, choosing between seven day, 14 day and 28 day contract terms while setting their own daily interest rates for compete with other lenders in the market.

The lowest rate currently offered on KuCoin is an annual rate of 1.82% on a seven-day contract.

As the data provided shows, there are several ways to increase a Bitcoin stack instead of just buying on the open market, but they are getting scarcer over time.

As large institutions, energy companies and governments begin to develop Bitcoin mining infrastructure, smaller market players are increasingly squeezed out as cloud mining facilities are unable to keep pace with the market. request.

Bitcoin loans increasingly look like the primary means by which BTC holders will be able to earn a return paid in BTC in the future, while Bitcoin backed loans offer hodlers a way to access the value of their tokens. without the need to sell and create a taxable event.

Want more information on trading and investing in the crypto markets?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.

[ad_2]