Bitcoin mining profits soar 35% as Chinese miners face displacement

Analysts forecast an increase in Bitcoin mining profits to around 35% in the short term. This will be a consequence of the crackdown on Bitcoin mining in China. As the crackdown unfolded, much of the hashrate that came from the Bitcoin network disappeared. Mining companies struggle to relocate, and some may even fail because of the complex logistics involved in the process. All of these reasons taken together can be a great time for new businesses to get into the mining space.

Bitcoin mining profitability will rise to 35% in the short term

Due to the complicated situation of miners in mainland China, the profitability of Bitcoin mining is expected to increase in the short term. This will continue in the short and medium term, according to Whit Gibbs, CEO and founder of Compass. Gibbs, he told CNBC:

“We expect a much more profitable time for Compass Mining customers. We assume that the miners will be around 35% more profitable. “

Compass is a Bitcoin mining company to start offering its services this year after receiving a $ 1.7 million investment in a circle last February. The results of the crackdown on BTC mining in China are likely to benefit future vendors and companies like them. Other crypto analysts agree. Darin Feinstein, founder of Blockcap, a North American mining giant, said:

“We assume that sales and profits will increase in the near future. It was an unexpected gift to the network, not just in terms of revenue, but also in terms of decentralization and sustainable energy metrics. “

Bitcoin was just experiencing one of the steepest drops in its history, with over 27% on a single hit. This means that most miners will reap more rewards in the short term. This mechanism is in place to keep Bitcoin functioning in the face of hashrate fluctuations like those that have occurred over the past month.

How Long Will Bitcoin Mining Profits Go Up?

Analysts and employees of mining companies estimate that this bonus period could last up to 15 months. Bitcoin mining is not an easy process, and the hardware required cannot simply be moved across borders. The logistics of moving a Bitcoin mining operation take months or even years to develop. Some operations may not even relocate and may choose to exit the mining business for fear of retaliation in mainland China.

Such is the case with Liu Hongfei, a Chinese bitcoin miner. Hongfei told Reuters:

If the government won’t let me go, I’ll have to go.

While the situation is tense for the country’s established miners, exiting a new business opens up opportunities for entrepreneurs around the world.

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