BITCOIN DOWN: CAN INVESTING IN CRYPTO MINING PROTECT YOU?

Published : 6 years ago, on 28/03/2018

After skyrocketing to nearly $20,000 in December, bitcoin plunged in February to below $6,000. Since then, the market saw some recoveries, but it’s still far away from its massive winter highs, hovering around $8,000 at present. On the other hand, just one year ago bitcoin was trading in the range of $1,100–$1,300. Even at $8,000, the longer-term trend is still upward. Wild swings in prices like these are a boon for aggressive traders willing to be “on” 24/7. But what about those who want to invest in bitcoin without the sleepless nights?

According to some experts, bitcoin’s tumble could be due to uncertainty surrounding looming regulations combined with Google’s current ban on advertisements for cryptocurrencies and initial coin offerings – a popular way for blockchain- and cryptocurrency-related startups to fundraise.

Bitcoin’s current instability is particularly enervating for inexperienced traders and investors, who are very sensitive to price drops. More seasoned traders know fluctuations can happen in a young market and believe in long-term value.

For just this reason the crypto community has embraced the term “hodl” or “hodling.” For the uninitiated, “hodl” mirrors a feverish investor’s misspelling of the word “hold” and describes a strategy of staying invested over the long term without losing one’s nerve and bailing when prices plunge. “Hodling” requires patience and faith in long-term value. Since bitcoin price fluctuations resemble dynamic systems where the flutter of a proverbial butterfly’s wings in one place can cause a storm somewhere else, “hodling” might be the best means to profit from investing in cryptocurrency.

“When people buy and sell in a dizzied cycle, they miss the bigger cryptocurrencies picture and the blockchain technology on which they are traded,” notes financial advisor Ric Edelman, founder and executive chairman of Edelman Financial Service. “There’s no question that digital currencies are the future. You should be prepared to own it for years.”

Of course, if one is a newbie in the crypto world, the practice of “hodling” can be quite nerve wracking. Investing in crypto mining, for example, can be easier to bear, as it can provide a “cushion effect” to cryptocurrency price fluctuations. Even if the price of bitcoin drops, the right investment in crypto mining can give you output in cryptocurrency which in the very least amortises the decreased value of the cryptocurrency. In the long run, a strategy of “hodl” plus investment into crypto mining can provide more stable returns and peace of mind than reacting to every increase and decrease.

Miner One is one of the crypto mining companies that impressed industry experts with a solid team of data center veterans, in-depth reporting on progress in securing facilities and top-tier mining equipment, along with its focus on responsible mining by choosing renewable energy power providers that offer cheap electricity rates in sub-Arctic Luleå, Sweden. Investing into Miner One requires no technical knowledge of bitcoin mining and can serve as a cushion during downturns.

“For example, if bitcoin were to drop to around $3,200 this year and as low as $400 after three years, mining difficulty would decrease significantly and, over that 36-month period, we can generate a 23–24 percent return on your investment,” says Pranas Slusnys, CEO of Miner One. If you were holding it, you would lose. But your investment in crypto mining would be a winner by any measure.

In summary, those who are anxious about cryptocurrency price fluctuations but ultimately believe in the technology behind it and that the young market will grow, despite ups and downs, should not merely “hodl”, but also make an educated investment into crypto mining. Over the long run, such a strategy can provide greater stability and good returns in a volatile market.