Survival Guide: Crypto Winter
By Tim Mandell and Crystal J. Milburn
If cold temps cause contraction then crypto winter is definitely here. Contracting crypto prices are no secret as Bitcoin (BTC) still sits at sub $20K, but what are the next steps? The last crypto winter lasted three full years, from 2018 to 2020, when “Bitcoin lost more than half its market cap, and other cryptos, such as Ethereum and Litecoin (LTC), dropped sharply.” (Forbes) Survival of the fittest applies perfectly here and we have your crypto winter mining survival guide.
The Long Game
Look, we’ve talked about mining in a bear crypto market before (not unlike down stock markets) and crypto winter is along the same vein. The green startups and hobbyists will likely be weeded out while mature companies will continue to grow and invest.
Just as profitable investors play the long game, refusing to jump ship when the market drops, DC Mining is here for the long haul so you don’t have to freeze this crypto winter. We’re practicing what we’re preaching and we’ve been very consistent with our messaging. Nobody can predict what’s next, but we’ve been warning you about the horror stories for a while now. Here’s what you need to know when it comes to mining crypto during a winter freeze.
Faster (and bigger) isn’t always better.
We understand that the market is changing rapidly and it’s important to be nimble and quick. However, when it comes to longevity, find a cryptocurrency mining operation that has 1) been around longer than five minutes, 2) doesn’t reek of desperation and 3) isn’t letting speculation drive. Slow and steady wins the crypto race, contrary to popular belief. Do your due diligence! We’ll tee up our parent company, MDI Access, for you to check us out if you’d like but please don’t judge the book by its cover (website redesign coming very soon).
Seek fiscal responsibility.
How does “slow and steady” translate in the crypto space? Two big-name crypto mining players have faced major shakeups, one recently filing bankruptcy. We aren’t here to put anyone down but to help you learn from others’ mistakes; if the company you want to do business with is taking out large loans (upwards of $300MM) to host your miners, it’s a red flag.
Which sounds better? Working with a company that came out fast and furious, needing a loan for a feast, or, one that takes smaller bites and makes decisions based on sales efforts, solid pipelines and solid construction? Find a vendor that will treat your money like it’s their own, which, to us, means operating lean, being willing to pivot and answering directly to you (i.e. privately held). Not one chasing the newest shiny object based on pure speculation.
Don’t play in the equipment broker/reseller sandbox.
When you broker equipment, you leverage yourselves for more ups and downs, bias and lack of trust. It’s easier to get out of integrity and lose focus when you’re both hosting and brokering miners. Those are just some of the reasons why we are not a reseller. You are our sole priority.
Take it personally.
If you’re not working with someone who takes your success personally, then they’re probably in it for the wrong reasons. Not to sound boastful, but we have walked away from million-dollar deals that just didn’t feel right. It’s not “if you build it, they will come” for us. Quite the opposite, actually. We’re going to do right by you every time, which is why we’re asking for a little more patience than you’re probably used to having. The good news is, we’ll make it worth your while every single time.
Final Thoughts
Pivoting and changing plans - even when we may not use some of our purchased assets - means driving CAPEX down. Take our Davenport facility, for example. We’ve converted it into an outdoor mining container space because that’s what our customers needed most. But, if that pivot hadn’t worked out, we were and are set up for existing cash flow to support our expansions/purchases vs. counting on new, potential revenue to fill them. The last thing any business wants is to be upside down on a loan.
We’ve been around since 2015 and we’re not going anywhere. We may not always have what you need at the moment you need it but, rest assured, we’ll find and/or build it. And we won’t get sloppy and rush it but we will hustle and work efficiently for you to turn a profit!
FOR SALE: If you are in the market, we have 2 megawatts worth of Raptor Power Systems electrical gear to make your site plug and go ready. For more information, give Tim a call at 309-945-3369.