When the mining boom will end

Cryptozyme, which started in 2022, has greatly affected the income of digital coin owners due to falling asset prices and rising hash rates following the Ethereum change. It is still unknown when the mining boom will end in 2024, but according to experts, cryptocurrency mining can still be a profitable business.

Prospects for mining in 2024

Experts are skeptical of comments that mining will pay off the equipment. Negative opinions are due to restrictions on mining, the use of cryptocurrencies in countries, and the increasing risks to the industry in the latest price drop.

Impact of Cryptozyme

Falling rates have had a major impact on profitability. Cryptocurrency capitalization fell to $835,000,000,000 thousand dollars in December 2022, 62% less than at the end of 2021. As a result, the key cryptocurrencies – Bitcoin, Ethereum – experienced severe price drops. Bitcoin has decreased in value 3 times since 2021.

At the same time, the price of electricity has remained the same, and the hash rate of some networks has increased after the change of the Etherium algorithm.

The chart shows that the hashrate has increased 3 times since 2021, while the price has fallen. Because of this, the future of mining and the prospects in 2024 have come into question as more and more people are leaving the industry. Jaran Mellerud, an expert at crypto company Luxor, said: “Miners acted very confidently, expecting BTC to reach $100,000 in 2022. They didn’t even expect the price to be at the 20,000 level.”

1

ByBit

5020 $
bonus for new users!

9.8

VISIT Read Review

ByBit provides convenient and safe conditions for cryptocurrency trading, offers low commissions, high level of liquidity and modern tools for market analysis. It supports spot and leveraged trading, and helps beginners and professional traders with an intuitive interface and tutorials.

2

Binance

Earn a 100 $ bonus

for new users!

9.5

VISIT Read Review

The largest crypto exchange where you can quickly and safely start your journey in the world of cryptocurrencies. The platform offers hundreds of popular assets, low commissions and advanced tools for trading and investing. Easy registration, high speed of transactions and reliable protection of funds make Binance a great choice for traders of any level!

As a result, miners who operated in regions with expensive electricity and took out loans for equipment had to stop their farms. The charts show a paradox – large companies declare a decrease in turnover, but the hash rate of popular blockchains continues to grow. This can be explained by the fact that some miners use outdated ASICs – video cards, which, taking into account the associated costs do not pay off or bring too little profit.

There are 3 models that remain profitable even during cryptozyme. They mine between $4 and $9.5 after deducting the price of electricity ($0.1/kW).

It turns out that despite the general drop in exchange rates and multiple growth of hash rate, there is still an opportunity to earn good money. The main thing is to upgrade equipment while prices are at their lowest. Therefore, it is more fair to say that the bear cycle is not a crisis, but an opportunity to enter the industry while the threshold is relatively low.

Expert predictions

In 2023, cryptocurrency mining, according to experts, will be more difficult. It is necessary to look for profitable sources of electricity. When more people stop mining, mining will become more profitable than in 2022, if you use asics. Miners with video cards, most likely, in 2023 will not recoup their investments in them because of the high cost of electricity and profitability of about 0.2-0.7 dollars per day.

Hut 8 expert wrote in an article about mass bankruptcies and possible price increases in 2023. Jaran Mellerud thinks we should look for countries with cheap electricity.

“Unless there is a good growth, which I doubt, miners will start hoarding coins in 2023 to sell them at a more favorable value in the future. The biggest trends of the year will be cost reduction and the search for new options to optimize farms,” the expert said.

Analysts advise miners of digital coins to look for new sources of electricity, the cost of which will be more stable, as well as to move to other regions. Siberia and the Urals, where the cost of kW does not exceed 0.046179, which is 2 times lower than in Moscow, will be well suited for this purpose.

Draft law on cryptocurrency mining

In Russia, laws on blockchains are being worked on for a very long time. In 2023, deputies will define what is the mining of digital coins. Experts wrote it at the end of 2022, but the document did not pass inspection due to errors and negative comments.

The article does not answer several questions until the end, but it is known that after the adoption of the law in the country there will be a special regime for miners. According to experts, it does not imply a positive change in the situation in the Russian Federation and financial support.

After the introduction of the law, mining will become a legal way to earn money, but companies will have to pay taxes and register a legal entity. At the same time, advertising of equipment, farms and the industry as a whole will be prohibited.

Will there be income from cryptocurrency mining in 2024?

Experts believe that it is more profitable for investors to buy coins rather than equipment. Equipment is more difficult to sell in case of changes in the market situation, unlike digital coins. Mining on video cards on profitability may be inferior to investments in cryptocurrency.

Name	Hashrate	Revenue (in dollars)	Net profit (in dollars)
GeForce RTX 4090	220 Th/s	1,64	0,73
GeForce RTX 4080	122 Th/s	0,91	0,31
GeForce RTX 4070 Ti	100 Th/s	0,74	0,29

If a miner does not plan to close the farm, he should at least sell the GPU and invest in ASICs. The most profitable graphics cards bring up to 0.73 dollars of net profit. It turns out that in the best case investments (taking into account the cost of equipment) will pay off only in 2000+ days.

When the mining boom will end

In 2022, the industry saw a drop in demand and prices for video cards. The main reason is that some of the miners closed their businesses. The graph shows the drop in demand for equipment.

Experts also believe that the mining boom will stop in 2023. From the cryptozyme suffered a significant part of the digital community, including a large company Core Scientific, because of which hashrate growth rates will decrease already this year.

What affects miners’ profits

Several factors affect the profits of miners. Among them:

• The situation in the market – the number of miners, the hash rate of the network, the coin rate, the demand of investors for digital currencies.
• Halving – the amount of remuneration.
• Commissions – writing off a certain amount by pools and networks for transactions.
• Hashrate of the farm – the number of video cards, asics.
• Additional costs – the cost of electricity, equipment maintenance, as well as the cost of selling coins.

Today’s income from cryptocurrency mining

For example, a miner has an asic for $4,745.44 and plans to mine BTC. A farm with a hash rate of 198 Th/s will earn $4,371 in 2023, and electricity for a year is sold at $1,200. It comes out, the user will get about $3170. The calculations are done in the Cryptocalc calculator.

The formula does not include the costs of currency exchange, as well as the cost of additional equipment. Now is the best time to enter the industry. Video cards have fallen in price, so after the increase in cryptocurrency rates, the equipment will quickly become profitable.

Is it worth it to start mining in 2024

It is not known how long mining will live, the forecast for 2024 from experts also does not give a clear answer. If a good growth in the value of digital coins really starts, then now miners can start mining and accumulate enough cryptocurrencies for the next increase in rates.

Frequently Asked Questions

📌 What is the best way to mine in 2023?

HDD mining is the best option. Good hardware sells at prices lower than video cards and uses less power.

⚡ Where is the cheapest electricity in Russia?

For large farms choose Irkutsk. Electricity costs only 0.018969 dollars.

🛒 Is it worth buying used equipment?

Since 2022, miners have started to sell equipment at reasonable prices. It can be bought to increase hash rate and create a new farm. The main thing is to determine the remaining resource of the equipment.

✨ Is it worth using cloud mining?

Experts believe that it is a scam. Due to hidden commissions and the possibility of the company to unilaterally terminate the contract with the miner to get profit will be problematic.

🔥 Is mining in an apartment possible?

The laws of the country do not yet require stopping the mining of digital coins. In 2023, the situation will change, so for the future it is worth finding another place to operate the farm.

Is there a mistake in the text? Highlight it with your mouse and press Ctrl + Enter

Author: Saifedean Ammous, an expert in cryptocurrency economics.