Reportedly, many companies have lost most of their profits during the prolonged bear market, some of them even decided to cut employees or even close the business altogether. Is the cryptocurrency mining these days really so unprofitable?
There is no correct answer to the question, since it can not be generalized.
According to Mineable, it depends completely on the location of the mining, since factors such as the cost of electricity are very important. In fact, it can even be considered as the “make or break” aspect of such businesses.
Of all the countries in the world, it is said that Venezuela is the paradise of the mining crypto because it has the lowest electricity tariff in the world, with only $ 0.002 per kWh.
To give an idea of how “cheap” it is, in the United States, it costs around 12 cents per kWh, while in Europe it varies from 9.6 cents per kWh as in Bulgaria to 30.5 cents in Denmark and Germany.
The number also means that 1 BTC can be extracted at a cost of less than 600 USD.
There is a trap, although to captivate the low cost of electricity. Venezuela is one of the countries that has not been very welcoming for mining companies.
In fact, the reports of miners arrested with fabricated charges have occurred several times, and the most recent occurred in 2017.
It is said that unclear regulations combined with a corrupt government are the “excuses” for such unfortunate incidents that happened to Bitcoin miners in the country.
Despite the bad news from the cryptographic mining industry, there are some parts that can still make money in the bear market, even when 1 BTC is valued below $ 3,000.
In Ukraine, Uzbekistan, Trinidad, Kuwait, Myanmar and Belarus, “only” costs $ 2,000 to generate 1 Bitcoin.
Other countries such as China, Canada, Albania, Bangladesh, Egypt, Ethiopia and India cost between $ 3,000 and $ 3,500 to exploit 1 Bitcoin, which is just at break-even.
In comparison with South Korea, it costs $ 26,170 to exploit a unique BTC.
To conclude, it is not always unprofitable to mine cryptocurrencies during the bear market. You just need the “right place” to do it, while waiting for the bull to come and the price to rise again.
Also published on Medium.