How Profitable Is Bitcoin Mining?

As I write this in the wake of a lengthy bear market (which counterintuitively, might be the optimal time to commence mining), most machines consume about $200 worth of electricity each month at standard hosting rates, and yield an income of $250-$300 per month. 

The net profit per machine per month, therefore, is approximately $50-$100. 

This may seem insignificant. Depending on the cost of your mining equipment, you might break even in a few years based on mined coins alone, assuming current conditions persist.

But here’s the thing: conditions always change.

As miners, we bet on the fact that circumstances will fluctuate, and historically, they always have. Take the peak of a bull market as an example. During such periods, a miner currently yielding $300 per month could generate $1000 or more. Just a few months of such revenues can reimburse your initial investment a few times over, shortening your breakeven time from years to a few months.

Moreover, in past bull runs, Bitcoin miners have outperformed Bitcoin in terms of price. 

That $2500 machine you purchase today might sell for $10,000 within 12-24 months. They have historically, and nothing looks different to me this time.

This allows you to ‘double-dip’: you mine coins for regular income, then sell your equipment at a hefty profit at an opportune moment. 

Many miners have made millions by strategically timing these cycles, earning continuous monthly revenue from their fleet while multiplying their investment tenfold or more. It’s a more complex process than merely buying Bitcoin, but it might just be worth it.

My advice is to consider your entry point into the Bitcoin mining market carefully. A poorly timed entry could spell disaster, while a well-timed one, or consistent investment over time, could provide a smoother journey.

In my opinion, the present moment is ideal for building your mining fleet in anticipation of the 2024-25 Bitcoin bull market. We may witness its onset much sooner, given the approaching halving date.

Of course, these are short-term profit figures. However, from a long-term perspective, Bitcoin mining allows you to purchase Bitcoin at the cost of your energy rather than at market price. 

This chance to create an asset at a discount to its market price is worth considering, especially if you share my belief that Bitcoin is the best store of value asset ever created and that it’s only a matter of time before the world realizes this.

Once global demand for Bitcoin from significant capital pools rises, acquiring Bitcoin on an exchange could become exorbitantly expensive or even impossible. 

In that scenario, mining might be your only avenue to own Bitcoin.

Though this idea might seem far-fetched, the high profitability of mining during bull markets can be attributed to the constant issuance of a predictably produced asset whose price appreciates much faster than the input costs or the ability to quickly build power infrastructure. 

The early miners of each cycle are rewarded with the momentum of a huge wave for their courage and conviction during times when mining profitability appears least attractive.

Mastering the mining game involves a certain degree of foresight and audacity, coupled with steadfast belief in the face of market apathy. If you witness daily Bitcoin deposits in your wallet, it certainly becomes easier. You know your Bitcoin is untouchable, while everything else debases to zero.