Bitcoin’s rapid rebound above $ 46,000 has again called for a BTC price of $ 100,000 by the end of 2021, while the impact of China’s crackdown on the mining industry is slowly waning as the hash rate of the Bitcoin network Showing signs of recovery.
One of the side benefits of China’s crackdown is that it has lowered the barriers to entry into the Bitcoin mining space, which has been shown to generate profits in both bull and bear markets.
Bitcoin mining is one of the few ways investors can acquire BTC without buying it directly from the market, and it is fast becoming a big money-interests dominated industry that can afford the electricity costs and upkeep necessary to run one Mining operations are required.
Here are some options for the average crypto stacker to purchase more BTC through cloud mining contracts, crypto lending platforms, and centralized exchanges (CEX).
Cloud mining contracts
The cloud mining industry has been around since the dawn of Bitcoin, offering those interested in Bitcoin mining who lack the space, equipment, and electricity the opportunity to outsource their production.
Some of the better known companies that have offered cloud mining services are Genesis Mining and HashNest, but the demand for their services has exceeded their possibilities, resulting in all of their Bitcoin mining contracts being sold out.
One of the current mining operators with available contracts is Shamining, a UK-based company that has been operating since 2018 and claims to have data centers worldwide with locations in California, Mexico, Cape Town, South Africa and London, England.
Through this service, users can rent mining equipment and pay the associated costs of running the units while the company handles the physical housing, operation and maintenance. After commissioning, the generated proceeds can be withdrawn to a Bitcoin wallet specified by the user.
Current leases include two options for GPU miners that cost around $ 283 for 23,580 gigahashes per second (GH / s) or $ 1,066 for 94,340 GH / s, and another option for ASIC miners with a current cost of $ 2,571 for 235,849 GH / s of mining power.
All contracts state that their profitability starts at 143%.
Another option that allows users more flexibility in the parameters of their mining contract is ECOS, a company that emerged from the Free Economic Zone in Hrazdan, Armenia and has been in operation since 2017.
As can be seen in the graph above, a 50-month contract for 9 terahashes per second currently costs $ 1,668 and is expected to result in a gain of 272.82% at a BTC price of $ 70,000.
It should be noted that all cloud mining services warn of the high risks involved and no profit can be guaranteed. This could be due to a variety of circumstances including fluctuating electricity prices, bitcoin price volatility, and advances in mining technology leading to a significant increase in mining difficulties that make older equipment obsolete.
Related: Bitcoin mining difficulty increases a second time as miners settle offshore
Crypto credit services
A more traditional option available to hodlers to purchase more Bitcoin using their current stack that doesn’t require further investments like mining is loan services that offer a return on deposits.
Nexo and Celsius are two of the most popular loan platforms that enable cryptocurrency users to borrow funds against their crypto holdings or earn rewards for deposits.
At the time of writing, Celsius is offering users an annual percentage return (APY) of 6.2% on bitcoin deposits, and Nexo offers a standard return of 5% on flexible time deposits, while fixed-term deposits with a minimum term of one month can earn 6%.
A third option that gives users a 4% return on BTC deposits is BlockFi, a crypto asset service provider that offers interest accounts and crypto-backed loans and recently also launched a Bitcoin Rewards credit card.
Related: Which bear market? Investors throw record money behind blockchain firms in 2021
Earn BTC from centralized exchanges
Several centralized exchanges also offer Bitcoin holders a return on their BTC deposits, albeit at prices lower than those listed above.
Binance, the largest CEX in the crypto ecosystem, is offering users an estimated APY of 0.5%, while the third-tier exchange Huobi is offering 1.32%.
The best returns offered on a US-based CEX can be found at Gemini, where users can earn 1.65% on their deposits.
KuCoin offers a freer market approach to BTC lending, where lenders can set the parameters of the loan terms and choose between contract lengths of seven days, 14 days and 28 days, while being able to set their own daily interest rates to compete with other lenders Market.
The lowest interest rate currently offered on KuCoin is an annual rate of 1.82% for a seven-day contract.
As can be seen from the data provided, there are several ways to grow a bitcoin stack instead of simply buying it on the open market, but they are becoming increasingly scarce over time.
As large institutions, energy companies, and governments begin to develop Bitcoin mining infrastructures, smaller market players are increasingly crowded out as cloud miners are unable to keep up with demand.
Bitcoin lending is increasingly looking to be the primary method by which BTC holders will be able to earn returns paid in BTC in the future, while Bitcoin-backed loans provide hodlers with a way to access the value of their tokens without them sell and have to create chargeable event.
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