Bitcoin and crypto mining in 2021 – the expected trends
It is the wish of every beginner or seasonal Bitcoin and crypto miner to have a yielding 2021, especially after a very confusing and challenging 2020. We have all seen what the Coronavirus pandemic has done not only to the crypto mining sector but to cryptocurrency in general. Despite the Bitcoin profitability levels halving in mid-2020, there has been an upward trajectory from late 2020 that is spilling over to 2021. This alone is enough reason to say that the crypto mining industry will be better in 2021 than in 2020.
Here are the trends you should expect from the Bitcoin and crypto mining industry in 2021.
The mining industry will expand
The general rise in Bitcoin prices will definitely steer mining profitability. This can be easily backed up by the fact that due to the price rise, many miners will join the network, forcing the hashing power to move up. Since Bitcoin’s hash rate has always followed its market price, we expect to see this trend even beyond 2021.
According to DailyCoin, to calculate the profitability of mining Bitcoin, one should also keep in mind the knowledge of how long it takes to mine 1 Bitcoin, as well as mining hardware, way of mining, hash rate, and mining difficulty.
There will still be constraints in the supply of mining hardware
The restrictions on shipment and logistics operations don’t seem like they will be lifted any time soon. We should, therefore, expect to face the same problems of working with less efficient machines and doing most of the mining operations offline.
At least now that we understand the pandemic better, it will be a little bit easier to navigate through this in 2021 than in 2020. It is good to note that the industry’s big players will still enjoy the benefits brought by the rising Bitcoin exchange rate amid all these challenges.
The industry will face more geographical dispersion
China is, without a doubt, the heart of crypto mining in the world. The highly institutionalized cryptocurrency mining industry is slowly being faced out through the industry’s ongoing shift away from China. Cryptocurrency and crypto mining has recently penetrated other parts of the world and this trend is expected to continue throughout 2021.
There will be a need to create long term business models
For businesses to succeed in the mining industry in 2021, they will be required to effectively manage their leverage and be ready to deal with anything that comes up along the journey. This simply means that they will have to build long term establishments to remain in operation.
There will be more consolidations and mergers
We have already seen that in Bitcoin and other crypto mining, the smaller players can only survive if they integrate their operations with the leaders in the industry. In 2021, we are likely to see more mergers and consolidations as existing mining operations try to build sound infrastructures that will keep them in existence.
No major technological advances
Contrary to what the better proportion of us thought, no prime technological breakthrough is meant to happen in Bitcoin mining in 2021. This is supported by the fact that so far, we have not seen any new mining hardware or technologies.
Despite this, there is a clear projection that in 2021 cryptocurrency mining will be greener, more eco-friendly, and sustainable. The use of renewable energy in the crypto mining arena is expected to advance in 2021 and the years ahead.
Many cryptocurrency regulations will target mining
Perfect examples for this are the USA and Russia. In the USA, many regulations pertaining to cryptocurrencies have already been finalized and in 2021, the probability of new regulations targeting mining is high. The Digital Financial Asset and Digital Currency regulations signed into law in July 2020 by the Russian president came into operation in January 2021. We also expect to see from Russia’s Ministry of Finance, regulations tailored explicitly to cryptocurrency mining.
Final thoughts
In general, expect cryptocurrencies and crypto mining is expected to continue booming in 2021. There will, of course, be a few challenges in the industry, especially due to the continuing pandemic, but projections are signaling that we are in a better place to overcome them in 2021 compared to the past year.
The involvement of more corporations and institutions in Bitcoin will slowly eliminate the risk of price falls that hold back many investors from investing in this sector. Similarly, with the cryptocurrency market dispersing worldwide, it is clear that crypto mining will be a serious and yielding industry in 2021.
