In the cryptocurrency market, price fluctuations are often one of the biggest challenges miners face. For many miners, even if 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 secure stable income has become a central issue for miners.
ViaBTC provides effective risk management and liquidity solutions for miners through two innovative financial tools—Hedge Service and Crypto Loan. These tools offer unique advantages to help miners deal with market fluctuations, secure profits, and maintain liquidity. This article will introduce these tools and analyze how they help miners secure their profits during market volatility.
Hedge Service: A Strategy to Secure Profits in Advance
The operation of the Hedge Service is relatively simple. It is an effective way to protect against market price fluctuations by securing profits in advance. When the market is at a high point, miners often worry that prices will fall, which could negatively impact mining profits. The Hedge Service provided by ViaBTC is essentially a profit insurance. Miners can borrow cryptocurrencies and sell them at the current market price, securing profits for a future period. This approach prevents potential losses due to price volatility. Then, miners continue mining in the pool, using the Bitcoin they earn to pay back the borrowed coins, thus achieving stable profits.
For example, when Bitcoin reaches a high price of $100,000, the experienced miner Alice sees her account consistently producing 0.1 BTC per day but is filled with anxiety. Based on her years of experience in mining, she believes that this price may be a temporary peak, and a correction may 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 moment, Alice uses ViaBTC's Hedge Service: the platform estimates that her production over the next 180 days will be 18 BTC. With only 3 BTC as collateral, she immediately secures $1.8 million in stable funds. Over the next six months, the 0.1 BTC she mines each day will automatically pay off the loan while freeing up the equivalent of 10,000 USDT for her available account.
180 days later, the market confirms Alice's forecast. When the price drops to $80,000, the 18 BTC would be worth only $1.44 million under the traditional approach. However, by securing profits in advance, she successfully maintains the $1.8 million in gains, effectively making an additional $360,000 even with the price drop. This method of securing profits in advance essentially uses financial tools to realize future gains at an ideal price, building a buffer for miners against a bearish market.
The advantage of the Hedge Service is that it helps miners secure future profits during market fluctuations. In this way, miners not only avoid losses caused by falling prices but also generate stable profits, allowing them to focus on mining without constantly worrying about market price volatility.
Crypto Loan: Retaining Upside and Managing Liquidity Flexibly
In addition to preventing losses caused by falling prices, miners may also face short-term cash flow issues. In many cases, miners may want to hold large amounts of cryptocurrency and believe in the potential for long-term price appreciation. However, they may urgently need funds for electricity bills or maintenance of mining machines. This is where the Crypto Loan service becomes particularly important. Unlike the Hedge, the 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, thereby preserving the potential appreciation 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 finds himself in a dilemma with his 10 BTC. Selling them now for $1 million could cause him to miss out on future gains, but his electricity bill and other expenses are already urgent.
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 skyrockets to $120,000, making his 10 BTC worth $1.2 million. He only needs to pay back the loan and can recover all of his pledged assets. Compared to the traditional method of selling BTC for cash, this approach not only solves his immediate problem but also allows him to enjoy an additional $200,000 in appreciation.
The advantage of the 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 a 'crypto credit line'—they don’t need to sell their Bitcoin at a loss while ensuring their mining operations run smoothly.
A Dual Approach to Protecting Miners' Profits
For miners, the risks posed by market uncertainty cannot be ignored. By combining the use of the Hedge Service and the Crypto Loan, miners can respond flexibly to different market conditions. When they anticipate a market downturn, the Hedge helps secure existing profits; when they are optimistic about long-term value, the Crypto Loan ensures that operations continue without missing out on potential profit opportunities. Although these two tools may seem to have opposing goals, together they form a comprehensive risk management framework that frees itself from the rigid constraints of traditional finance.
For example, a miner could start using the Hedge Service to secure next year's mining profits during the early stages of a bear market in late 2021. In 2024, they could use the Crypto Loan to obtain funds to upgrade their mining machines and increase their hash rate, thus earning more mining profits when Bitcoin reaches a higher price. This strategy of 'preserving profits during downturns, increasing investments during upswings' has allowed some miners to achieve growth even during industry restructurings.
With the continuous development of the mining industry, the core competitiveness of miners is shifting from merely competing for hash power to having comprehensive risk management capabilities. ViaBTC provides not only two financial tools but also a survival philosophy for managing market cycles: while others passively endure losses during price fluctuations, financial derivatives can help miners build a safety net for their profits.
In an environment where uncertainty is the norm, miners can not only find stable income paths amid market fluctuations but also flexibly seize market opportunities to achieve higher profits by utilizing ViaBTC's two financial tools. Therefore, in facing the challenges of the future market, miners should strategically leverage these innovative tools to secure their long-term profits and stable mining development.
