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Bitcoin mining is a highly specialized business

Today's mining rigs are made up of complex networks of specialized computers specifically designed to work on for bitcoin protocol.  To be profitable, it also requires the cheapest sources of energy available.  There are mining rigs set up around the world that compete for the Bitcoin rewards for each block. A very simple description of the Bitcoin mining business model would include the following: 

1.  Mine the Bitcoin.  This requires the use the cutting edge Bitcoin miners (computers) to maximize profits.

2.  Sell some the bitcoin to pay expenses.  This requires a cheap source of electricity to be profitable.

3.  Reserving a part of their Bitcoin to sell at the higher prices to sustain themselves during bear markets. This requires a keen understanding of the Bitcoin cycles to stay profitable over the long run. 

Now there is a new step that a couple of miners have started practicing:

4.  Buy more Bitcoin?

A couple of mining companies have limited their sales and have even resorted to buying Bitcoin on the market, which is the first time this has happened. What are these Bitcoin miners seeing in the market? I don't claim to know, but today we’ve just seen an increase in price to over $50,000 for the first time since 2021.  This upward trend is likely continue going up until the “halving” in April, when the block rewards are cut in half from the current 450 BTC per block. I'm not here to tell you how much Bitcoin you should buy.  Just make sure your Bitcoin holdings are larger than zero.  We’ve got a couple of links to purchase Elllipal and Ledger wallets from the manufacturers



at https://www.thebitbitepodcast.com/deals to store any crypto you have purchased. Hans and I discussed this and more in our 100th Episode of The Bit Bite Podcast.   Check it out wherever you get your podcast feeds.


Rick

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