1) A Bitcoin developer is buying and storing Bitcoin mining rigs in anticipation of their value increasing after the next Bitcoin halving event in 2024. 2) Bitcoin mining profitability depends on electricity costs as well as the value of Bitcoin, and older mining rigs depreciate over time. Countries with very low electricity rates see more Bitcoin mining. 3) Investing in Bitcoin mining machines carries risks similar to investing in gold mining stocks - their values tend to overshoot price swings in Bitcoin but collapse could follow if the Bitcoin market crashes.

1. By: www.ProfitableInvestingTips.com

2. An article in Bloomberg Crypto caught our eye. A
Bitcoin developer is buying and saving Bitcoin
mining rigs. They are expecting to sell them for
a profit at the next Bitcoin halving when they
expect the price of Bitcoin to soar. This got us
to thinking, are Bitcoin mining machines good
investments?

3. Using one of these specialized computing rigs a
person can make money. However, the pay for
this kind of work depends on the dollar value
of Bitcoin and the rate of pay for miners. On
top of that, they keep making newer, faster,
and more efficient computers for this job so an
older machine can be expected to depreciate in
value over time.

4. How Much Money Does a Bitcoin Mining
Machine Make?

5. According to Bitkan, a machine like an Antminer
S19 Pro makes a profit of $12 per day when
electricity costs $0.1/kW. This gives an annual
rate of return of 195% and a payback period for
the rig of 186 days.

6. To make the best money the miner needs to be
connected to a mining pool and needs to have a
low electric rate. The average electric rate in the
US is 23 cents per kilowatt-hour (kWh). Bitcoin
mining has more profit potential where electric
rates are a lot lower.

8. What Is Your Bitcoin Mining Electric Rate?

9. As of February 2023, the average residential
electricity rate in the U.S. was about 23 cents
per kilowatt-hour (kWh). Importantly,
electricity rates can vary widely based on
where you live. Rates vary from a low of 10.35
¢ / kWh in Idaho to a high of 28.38 cents per
kWh in California. The countries with kWh
rates of one cent of less are these listed in
decreasing order of price:

10. South Korea
Mexico
Turkey
China
UAE
India
Russia
Venezuela
Nigeria
Saudi Arabia
Qatar
Iran

This helps a lot to explain why so much Bitcoin mining happens in
places like these rather than in the USA.

11. Bitcoin Halving and Bitcoin Price

12. After Bitcoin halving in 2012, 2016, and 2020
Bitcoin prices soared. All of this was before
crypto winter and widespread disillusion with
Bitcoin and the rest of the crypto world.
Nevertheless, the next halving in 2024 when
miners are paid half as much as before to mine
Bitcoin could well drive prices up again. That is
what Bitcoin developer Blockchain Inc. is
betting on as they buy and store Bitcoin mining
machines which they expect to be high demand
in 2024.

13. Investing in Bitcoin Mining Machines

14. The CEO of Blockchain Inc. notes that the
application specific integrated circuits that run
Bitcoin mining machines tend to shoot up in
price as Bitcoin rises and fall when Bitcoin falls.
In each case they tend to overshoot. This, by
the way, is a bit like gold mining stock and the
price of gold. Thus mining stocks are briefly
better gold investments than bullion as the
market goes up. They are also worse
investments when the gold price crashes.

15. Will There Be a Bitcoin Mining Machine Market
Collapse?

16. Thus, the Blockchain Inc. folks are speculating on
a temporary price swing in Bitcoin causing a
greater price swing in Bitcoin mining
machines. So they are trying to corner the
market on these machines. Someone needs to
remind them of the Hunt brothers when they
tried to corner the market on silver bullion in
1979. The result was Silver Tuesday when the
silver market collapsed and sent the millionaire
Hunt brothers into bankruptcy.

17. For more insights and useful information about
investments and investing, visit
www.ProfitableInvestingTips.com.