In the cryptocurrency market, price fluctuations are often one of the biggest challenges miners face. For many miners, even though they are using highly efficient mining equipment, the instability of market prices can still have a significant impact on their profits. In this context, how to ensure a stable income has become a core issue for miners.
ViaBTC provides effective risk management and liquidity solutions for miners through two innovative financial tools—Hedging Service and Crypto Loan. These tools offer unique advantages in helping miners cope with market fluctuations, lock in profits, and maintain liquidity. This article will introduce these tools and analyze how they help miners secure their profits during market volatility.
Hedging Service: A Strategy to Lock in Profits in Advance
The operation of the Hedging Service is relatively simple. It is an effective way to hedge against market price fluctuations by locking in profits in advance. When the market is at a high point, miners often worry that prices will drop, which could negatively affect mining profits. The Hedging Service provided by ViaBTC is essentially a profit insurance. Miners can borrow cryptocurrency and sell it at the current market price, locking in profits for a future period. This approach prevents potential losses from price volatility. Afterward, miners continue mining in the pool, using the Bitcoin they earn to repay the borrowed coins, ultimately achieving stable profits.
For example, when Bitcoin reaches a high price of $100,000, experienced miner Alice sees her account steadily producing 0.1 BTC per day, but she is filled with anxiety. Based on her years of mining experience, she believes this price might be a temporary high, and a correction could happen in the next six months. If she continues to mine and sell in the traditional way, her actual profits will shrink drastically if the price drops. At this point, Alice uses ViaBTC’s Hedging Service: the platform estimates her output over the next 180 days will be 18 BTC. With only 3 BTC as collateral, she immediately gains $1.8 million in stable funds. Over the next six months, the 0.1 BTC she mined each day will automatically repay the loan, while releasing an equivalent of 10,000 USDT to her available account.
180 days later, the market confirms Alice’s prediction. When the price drops to $80,000, the 18 BTC would only be worth $1.44 million under the traditional approach. However, by locking in profits in advance, she successfully maintains the $1.8 million in earnings, effectively making an additional $360,000 even as the price drops. This method of locking in profits ahead of time essentially uses financial tools to cash out future earnings at an ideal price, building a buffer for miners against a bear market.
The advantage of the Hedging Service is that it helps miners secure future profits during market fluctuations. This way, miners not only avoid losses caused by price declines but also generate stable profits, allowing them to focus on mining without constantly worrying about market price volatility.
Crypto Loan: Retaining the Upside and Flexibly Managing Liquidity
In addition to preventing losses caused by price declines, miners may also face short-term cash flow issues. In many cases, miners may want to hold onto large amounts of cryptocurrency and believe in the long-term price appreciation potential. However, they may urgently need funds for electricity bills or mining machine maintenance. This is where the Crypto Loan service becomes especially important. Unlike Hedging, Crypto Loan is a flexible financial tool for miners who are optimistic about future price trends. By using this service, miners can avoid selling assets due to financial needs, thus preserving the appreciation potential of their holdings.
In contrast to Alice, miner Bob firmly believes that Bitcoin is still undervalued. When he urgently needs $600,000 to maintain his mining farm, he is caught in a dilemma with his 10 BTC. Selling them now for $1 million might cause him to miss out on future gains, but his electricity bill and other expenses are already pressing.
At this moment, ViaBTC’s Crypto Loan tool becomes the solution. Bob pledges his 10 BTC to ViaBTC and immediately receives $600,000 in working capital. After 30 days, the price of Bitcoin soars to $120,000, making his 10 BTC worth $1.2 million. He only needs to repay the loan and can reclaim his entire pledged asset. Compared to the traditional method of selling BTC to cash out, this approach not only solves his immediate problem but also allows him to enjoy an additional $200,000 in appreciation.
The advantage of Crypto Loan is that it allows miners to have the best of both worlds: they can retain ownership of their cryptocurrency assets while also accessing liquidity support when needed. For miners who need ongoing operational funds, it’s like having an “crypto credit account”—they don’t have to sell their Bitcoin at a loss, while ensuring their mining operations run smoothly.
A Dual Approach to Safeguarding Miners’ Earnings
For miners, the risks posed by market uncertainty cannot be ignored. By combining the use of Hedging Service and Crypto Loan, miners can respond flexibly to different market conditions. When they anticipate a market downturn, Hedging helps lock in existing profits; when they are optimistic about long-term value, Crypto Loan ensures operations continue without missing out on potential gains. Though these two tools may seem to have opposite objectives, together they form a complete risk management matrix that breaks free from the rigid constraints of traditional finance.
For example, a miner could start using the Hedging Service to lock in next year’s mining profits during the early stages of a bear market in late 2021. In 2024, they might use Crypto Loan to obtain funds for upgrading their mining machines and increasing hash rate, thus gaining more mining profits when Bitcoin reaches a higher price. This “preserve profits during downturns, increase investments during upturns” strategy has allowed some miners to achieve growth even during industry reshuffles.
With the continuous development of the mining industry, the core competitiveness of miners is shifting from merely competing on hash power to having comprehensive risk management capabilities. ViaBTC provides not just two financial tools, but a survival philosophy for managing market cycles: while others passively bear losses during price fluctuations, financial derivatives can help miners build a safety net for their earnings.
In an environment where uncertainty is the norm, miners can not only find stable income pathways amid market fluctuations but also flexibly seize market opportunities for higher profits by utilizing ViaBTC’s two financial tools. Therefore, in facing future market challenges, miners should strategically leverage these innovative tools to ensure their long-term profits and stable mining development.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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