Bitcoin Mining Outperforms Bitcoin Prices Trading At $50k

March 16, 2021 - Crypto News, Expert Commentary

Bitcoin Mining vs Trading

For many crypto analysts, the only Bitcoin stat that matters is the price. 

In the past few months, they have had every reason to keep their eyes on the prize. Bitcoin has been on a tear, recently rallying to $58k in mid-February 2021. 

This historic rally has placed cryptocurrencies on the financial high table. 

Purchasing and trading Bitcoin are now getting unprecedented legitimacy. Wall Street is taking a strong look at crypto, following the lead of Tesla, which invested $1.5 billion. 

That said, there are other ways to get involved in Bitcoin, and the technology behind it.

Some of the companies in these operations are even outperforming Bitcoin. 

Take for example stocks of Bitcoin mining firms

The Case of Riot Blockchain Stock Listed at NASDAQ

Bitcoin is up over 400 percent in the last six months. This appreciation is impressive enough, and cannot be overstated.

Well, that’s until you see the figures Riot Blockchain (NASDAQ: RIOT) is posting; up 1,600 percent in the same time frame!  

RIOT stocks rose to a whopping $79 in February 2021

This figure is a tremendous rise from October last year when the stock went for less than $5 on NASDAQ.

Riot Blockchain claims to be one of the biggest Bitcoin miners in the U.S. It is an example of a Bitcoin ancillary outperforming the asset. 

CEO Jason Les went on CNBC to explain the massive turnover. The Bitcoin market did not pick up significantly until the last quarter of 2020. Riot Blockchain had laid the groundwork for the rally before that. 

The company put a real effort into placing miner orders in 2020 that would be delivered in 2021. Riot invested capital in Bitcoin mining at a time when the market was still sluggish and is reaping tremendous benefits today. 

This strategy had great insight. In early 2021, it is very difficult to get mining equipment from elite companies like Bitmain. 

Companies like Riot Blockchain that got their equipment orders early are first in line. VBit Technologies also has a direct line to Bitmain.

It is difficult to get mining equipment orders filled now. Most leading mining manufacturers are sold out for months.

All about Hash Rate

Accordingly, Riot is deploying more hash rate at a time when there is a real opportunity for Bitcoin mining. 

Riot did grow its hash rate exponentially in 2020. Much of that growth came in the latter part of the year, with the more significant investment coming through in 2021. 

Their hash rate has got to 1 Exahash/second, which is an achievement. The total Bitcoin hash rate averages about 150 EH/s. Every ten minutes, one block containing 6.25 BTC joins the blockchain. Riot’s rewards are roughly their proportion to the total network hash rate. Add this to the transaction fees for each block, and their stock performance is understandable. 

Leading Bitcoin miners are in an arms race to take up more hash rate. The public firm wants to triple its hash rate in 2021, which is a lofty ambition. The announcement that it had crossed 1 EH/s sent its stock soaring. 

A person who had Riot stocks since mid-last year saw almost double the return that Bitcoin holders got. That is quite something. 

Institutional involvement in Bitcoin is the X-factor for this rally. For mining, institutional players are also betting big on the continual surge. The leading institutional miners have placed orders costing more than $500 million in recent months.  

Notably, U.S.-based institutions lead the way. Tesla’s billion-dollar bet was only the icing on the cake. Investments in Bitcoin and Bitcoin mining have been soaring since mid-last year. 

The Role of Miners and New Equipment 

Bitcoin miners made more than $1 billion collectively in January. The February figure could surpass that because Bitcoin has appreciated between the two months. 

Miners have a vital role in the Bitcoin ecosystem. They confirm transactions on the Bitcoin blockchain. These confirmations prevent the “double-spend” of Bitcoin. Accordingly, miners secure Bitcoin transactions. 

The process is incredibly competitive and results in a miner winning the right to add the next block of Bitcoin transactions to the blockchain. Computers run through hordes of number combinations to solve mathematical problems. 

This process is the Proof-of-Work necessary to come up with the right combination. A more powerful computer can run functions faster hence more likely to get the right to add the next block.

In recent years, Bitcoin mining equipment has gotten more sophisticated to maintain an edge. Bitmain’s Antminer S 19 rigs are some of the most powerful miners in existence. 

Bitcoin mining using such equipment is prudent. As more institutional buyers gobble up newer equipment, the clock is ticking on older equipment. 

This competition is not like older vehicles and new ones, where a person can still drive their ‘90s Chevy just fine. Mining equipment competes for finite resources as Bitcoin enters circulation once every ten minutes. 

There are hundreds of thousands of mining rigs competing for these rewards. Older mining equipment simply has no chance. 

In recent weeks, prices have rallied far ahead of the pace of mining difficulty. This rally may have made some reconsider older but cheaper equipment. As more rigs from the likes of Riot blockchain come online, the older equipment will become redundant again. 

Bitcoin Mining Is Where It’s at

The best performing asset last decade was Bitcoin, gaining a monstrous one million percent. Year-to-date, it has more than quadrupled in price. Some of the only companies that outperform the asset are Bitcoin ancillaries like Riot Blockchain.

Mining Bitcoin is growing more competitive. The fact that elite mining equipment is sold out shows that it is still viable and popular. Bitcoin rewards halved in 2020, but this has not dampened enthusiasm for miners.

The activity relies on computer equipment to do most of the work. Mining manufacturers are finding more efficient ways to conduct mining. This venture explains the evolution of mining equipment to the modern powerhouses that they are today. 

Bitcoin mining often operates outside the limelight. The public has a natural fixation on prices. Regardless, mining is still viable and can become a business activity for anyone with the skills and know-how to get involved. 

Purchase Equipment with VBit: Get Started In Bitcoin Mining  

From the aforementioned, it is no surprise that the latest Bitcoin mining equipment is out of stock. 

There is tremendous demand for mining rigs because of the general Bitcoin boom. Institutions are doubling-down on investments and making the sourcing of equipment difficult for regular persons. Mining manufacturers will prefer to deal with bulk orders because of the margins involved. 

Accordingly, VBit Mining is relevant to prospective miners looking to indulge. VBit is a professional equipment reseller in Philadelphia, U.S., that has a direct line to Bitmain–the world’s leading ASIC chip manufacturer. 

During this time of crunch, finding such a sourcing solution is invaluable. 

Besides, Bitcoin mining involves the logistics of cooling and power efficiency. Mining rigs consume tremendous amounts of power and generate heat.

VBit Mining professionally hosts and maintains Bitcoin mining rigs for clients. They have data centers in cool areas of North America to utilize natural cooling and cheap renewable power. 

These factors can be instrumental in making a Bitcoin mining operation viable.

Therefore, VBit is your reliable and professional partner in Bitcoin mining. With various resources on our website, even the newest person to Bitcoin can learn a lot.

Sign up on the VBit website to learn more about Bitcoin mining!

Subscribe and Follow

Hey! If you liked what you read, subscribe to our Blog and once a week we will send you a digest with our articles (tutorials, tips, expert advice, etc.).