User Case: Boosting Investment Returns to 192% with Cloud Mining

A real user's quote:

"Back then, the price of BTC was only $23,000, which was considered bearish. I didn't invest much, but I made about a 22% profit. However, the key is being able to hold onto it! I haven't sold anything yet and plan to consider selling only when it reaches even higher prices. I initially purchased 200T of mining power for 150 days, and in total, I mined 0.0786BTC. I've been holding onto it and using a staking loan approach, waiting for the right time to leverage the mining power. Hoping for a new high after the next halving next year."

To clarify, at the beginning, I had already pre-paid for 30 days, so the total, including electricity costs, was $1,914.3. With the current coin price of $34,720 and 0.0786BTC, that amounts to $2,730.

I've actually made $815, which is approximately a 42% return. That's not just good; it's "awesome."

User Mining Profit Analysis:

In total, I mined 0.0786BTC. If I were to sell it all at a coin price of $40,000, I would receive 3,144U. Considering that I initially paid for 30 days of electricity and used a staking loan to cover the subsequent 120 days of electricity costs (1,274.4U), I'm left with 1,869.6U. That means my initial investment of 639.9U turned into 1,869.6U, resulting in a net profit of 192%.

This strategy fully utilizes the combination of "cloud mining and collateralized borrowing," and if I had bought spot assets at the same time, buying at a price of $23,000 and selling at $40,000, the net profit would have been only 74%.

Profit Logic Summary:

The key takeaway here is that when calculating mining returns, don't include the subsequent service fees (electricity costs) as part of the cost. If you add up all the days of mining power fees and service fees as costs, you're using an "all-inclusive" approach for electricity costs.

Instead, by using a staged payment and paying for subsequent electricity costs through loans, without tying up additional capital, the initial order amount is the total cost. This approach results in significantly higher mining returns compared to the "all-inclusive" electricity cost calculation.

To put it more vividly, consider a property with the potential to be worth 5 million, currently priced at 1 million. You have only 200,000 on hand, and you lock in the property with a down payment. Later, you arrange to repay the property using third-party loans, agreeing to pay back 2 million, principal and interest. Ten years later, the property's value has indeed risen to 5 million. You sell the property, liquidate, and clear the 2 million loan, leaving you with 3 million. Your assets have grown from 200,000 to 3 million, not from 2.2 million to 3 million. The 2 million loan should not be included; your actual principal was only 200,000.

Similarly, if you have 1 million on hand and use it to buy a property outright, and after 10 years, it increases from 1 million to 5 million, you're left with 4 million. However, if you use the 1 million to pay down payments on five properties and, after 10 years, the properties have a total value of 25 million, deducting the 10 million in loans for the properties leaves you with 15 million.

This highlights the difference between mining with leverage and without. Of course, leverage comes with increased risk. When high future values are successfully realized, leverage undoubtedly maximizes mining returns.