With the huge increase in the price of cryptocurrencies, mining has become fashionable again. Just as coins have risen in price, computer hardware has also risen. Revaluing old card models and exhausting the existence of practically everything on the market.
Mining itself with either ASIC (btc miner) or GPU (video cards) has always been a profitable business. At the beginning of 2016 you could mine practically 2 ETH per day with a mid-range equipment, today each ETH is worth $ 1790 at the time of writing this article.
Despite this, we are currently in what Wyckoff and Elliot call the Market Euphoria. Exorbitant prices, excessive speculation and bullish sentiment that seems to have no end. But it is well known that moments of euphoria are the incitement to purchase by professionals seeking to withdraw their earnings.
Which means that right now, at this precise moment, buying Bitcoin or Ethereum is a great risk, a market at all-time highs that can quickly become overbought. So you can lose a lot of money if you intend to buy expecting even higher highs.
In a similar way it is happening in the video card market. Models like the Rx 550 or Rx 570 exceed $ 500. These models of more than 3 years ago cost in August 2020 between $ 90 and $ 120. New models like the Nvidia 3080 came to cost up to $ 250 today they pass $ 900.
A model like the Rx 570 can generate up to $ 1.20 per day today at market price with the BTC at $ 46,000 So here comes the big question that you should ask yourself at this precise moment if you have been interested in the idea of mining.
Is it worth paying $ 500 for an old model to get $ 1.20 a day? because paying $ 900 or $ 1000 for a new model doesn't make the slightest sense. Here the problem is not so much the performance of the card, because you are going to be obtaining BTC at a lower price than the market. The point is that you are going to pay triple for something that is actually worth much less.
The same has happened with the ASICs or Bitminers of $ 120, they have exceeded $ 500 giving a lower performance each time, because the difficulty of the protocol has risen considerably, that is, the difficulty to obtain the mined reward.
The impediment of the mining market is currently centered on the excessive price increase of the computer market. The most advisable thing for those people who want to enter this business is to wait for the low prices of the computer market, it is the only way to obtain a feasible return on their investment in mining.
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Alejandro Aristeguieta
CEO in Aristeguieta Capital.
Investment Firm and Financial Analysis.
