A large number of ASICs and video cards enter the secondary market when the value of bitcoin decreases. To make money, some people put fully built farms up for sale. The fear and greed index often reaches 0 during the crypto winter (the “extreme fear” zone). However, not all miners close their doors due to low lending rates. Other factors may apply to sellers, such as updates or personal circumstances. Experienced market players continue mining until they can earn at least enough money to cover their electricity costs. In this post, we will explain why mining farms are sold when they make a profit. Investments in old equipment can be successful.
Reasons for the sale.
The cost of devices is rising along with the rates of coins during the mania of the bitcoin market. The payback period of the video card is about a year, Asic – from 6 to 8 months. At the moment, the miners who previously founded the company decide to invest in another company with a high rate. A growing number of recent immigrants are becoming disillusioned with mining during the correction because they did not have time to return the equipment and they lost faith that it is still possible. In the conditions of the economic downturn, the availability of old equipment increases significantly.
Change in invested capital.
The payback of mining is calculated by selling equipment on the secondary market at a discount of up to 30-40%. Equipment that has been used for some time is usually auctioned off. ASIC processors take from 6 to 12 months, while video cards take from 1 to 2 years. As a result, farm owners reduce the payback of equipment.
The money collected can be used to buy brand new, economical versions. As networks become more complex, this allows you to maintain the computing capabilities of the farm at minimal cost.
Movements and individual conditions.
Selling a farm is a reasonable idea when living conditions change, when children are born, or when family disputes arise because of the noise of drilling rigs and other equipment. Due to unforeseen circumstances, some customers are forced to stop working, while others choose cloud mining. By the summer of 2022, you will be able to place up to 70% of your annual investments on remote servers.
A large number of miners purchased equipment on credit during the boom period. The debt can be repaid in six to twelve months due to the expansion of the market. Users, however, were unable to pay for electricity, hosting, and monthly bank charges as a result of the declining exchange rate. In this case, it is best to stop mining and sell the equipment to pay off the debt.
People often underestimate their talents and the potential of their business. Without a carefully thought-out business strategy that takes into account potential dangers, miners often start working. As a result, mining cryptocurrencies does not bring as much money as expected.
The pricing of cryptocurrencies has a significant impact on how profitable mining is. In November 2021, bitcoin reached an all-time high of $69,001. One or two powerful ASIC owners earned from $1,500 to $3,000.
By August 2022, the price of the primary cryptocurrency had decreased by more than 65%. At the same time, mining is becoming more and more complex. Asics have fallen in price by 1.5–2 times over the year. Experienced miners use this chance to increase their power. Losses are incurred by newcomers who bought equipment at the peak of the market.
The BTC rate is predicted by analysts with unimpressive accuracy. According to Michael Barry, who correctly predicted the stock market crash in 2008, prices will fall by at least 50%, prolonging the gloomy trend until 2023-2025. In order to return at least part of their investments, miners are forced to sell their equipment because of such opportunities. Those with mining experience continue to work as long as the profit pays for their utilities, and they expect prices to rise. However, to do this, you will need a second source of income and sufficient cash reserves. Not all beginners have access to these features.
Leading bitcoin networks are becoming more sophisticated. Mining companies are forced to expand their capacities by upgrading aging equipment in order to remain profitable.
By 2022, many data centers will host only the latest versions of ASICs. Farm owners resell used machinery until they run out of options. This money will be used to purchase modern equipment. Using this strategy, you can reduce the payback period of the equipment by two or three times.
The method can be changed to extract another coin. Newcomers who work from home do this most of the time. Big business owners like to mine the best currencies; some miners accept bitcoin exclusively. The complexity of the primary cryptocurrency network as of August 2022 is 28.17 thousand tons. Only with the help of reliable modern ASICs is it possible to produce coins.
Buying a used farm.
Both GPU and ASIC are used for mining cryptocurrencies. In the mining sector, the equipment is continuously operating at maximum capacity. In case of a problem, the gadget may stop working earlier than expected. Therefore, buying miners on the secondary market is dangerous.
You should pay close attention to the typical market price, carefully review the suppliers’ advertisements and test the equipment if you want to protect yourself. Advantages of such a deal:
1) Assemble and configure the equipment instead of waiting for the supply of components. 2) When buying used mining companies, a discount of up to 50% is offered.
Miners sell equipment for a variety of reasons. This does not always lead to a decrease in profitability. Many are forced to close their business for personal reasons, such as urgent financial need or relocation. During the cryptocurrency winter of 2022, several people lost faith in mining and succumbed to unfavorable opinions.
Buying equipment on the secondary market can be a profitable investment. However, before you start the transaction, you need to carefully select the displays and study the ASICs (graphics cards). Experienced miners take advantage of this circumstance to purchase inexpensive power in the hope of future expansion.
Experts’ forecasts, however, remain unclear. In June 2022, Coinbase reduced its workforce by 18% (1,100 employees). Brian Armstrong, CEO of the company, is confident that the bear market will continue for at least two or three more years as a result of the global economic downturn. On the other hand, according to Bloomberg analyst Mike McGlone, the price of bitcoin will rise and even reach $125,000 by the end of 2022. As a result, this is a great time to launch a successful business due to low card and ASIC prices.