If there’s one word to describe Filipinos, it would be “innovative.” The growth of multi-level marketing and online selling in the country is a testament to that. Making money from cryptocurrency in the Philippines is just one more endeavor our countrymen would be more than willing to dive into to earn some extra cash.
How Do You Earn Money From Cryptocurrency in the Philippines?
There are two ways to make money from cryptocurrency in the Philippines. The first one is mining. Mining means lending your computing power to the peer-to-peer (P2P) network that manages the blockchain, the digital ledger containing all cryptocurrency transactions.
Miners strive to outdo each other at solving a mathematical riddle that’s part of the transaction verifying process. This method rewards you with a coin, or fractions of a coin, for every contribution you make to the blockchain.
The second earning method is through trading. You buy and sell cryptocurrency on the market and profit from the price differences between your purchase and your asset disposal.
Is Cryptocurrency Mining Still Lucrative?
Crypto mining in the early days was very lucrative. For instance, miners can receive 50 Bitcoins for every transaction they can successfully verify. By 2012, they only received 25 Bitcoins per block they contributed to the chain. The number goes down by half every four years. By 2020, the reward is now 6.25 coins, the current rate until 2024.
Bitcoin’s creators implemented this security feature to control the circulation of new coins in the network. Since 18 million out of 21 million Bitcoins have been mined, that reward will go down even further until it stabilizes at its lowest amount.
It’s worth noting that Ethereum, the second-largest cryptocurrency, has no supply cap. This is because its network actively uses ETH coins as payment to initiate smart contracts.
Another factor affecting cryptocurrency mining profits is the rising equipment costs. Early miners simply contributed their personal computers’ power to the blockchain. However, in 2013, specialized mining rigs appeared on the market. These are more powerful but expensive computers that can verify transactions faster than personal computers.
As a result, new miners’ startup costs became higher. The price hikes slashed profits considerably. Despite that, the mining community continues to transact millions of dollars daily. If you decide to mine, you can still grab a piece of that figurative pie.
What Investment Do You Need to Make to Mine?
As mentioned earlier, you will need a computer with considerable hash power. This metric refers to how many blocks the unit can add to the blockchain within 24 hours. The rule of thumb: the higher the hash power, the more mathematical riddles your rig can verify and add to the blockchain. Thus, hash power is a significant factor in determining your earnings.
How much does a mining computer cost? Prepare to shell out about PHP100,000 or more for a specialized mining rig. The Antminer S19 Pro 110TH costs $5,755 on Amazon without a delivery fee. That’s a one-time investment of PHP322,280!
You must also consider other expenses like your power bill in your startup costs. The S19 Pro consumes 3.25 kilowatts per hour (kWh). This translates to PHP744.57 per day and PHP22,337.17 per month under the PHP9.5458/kWh rate in July.
How Much Can You Make When Mining for Cryptocurrency?
Your mining earnings depend on your computer’s hash rate and the exchange rate. If your rig can solve 100 riddles a day, you have a potential income of 6250 coins daily in your account. If you immediately cash out those revenues and convert them to Philippine pesos, you’ll receive roughly PHP7.6 billion!
Of course, these figures are theoretical. There is stiff competition among miners. In the Bitcoin network alone, professional miners are responsible for 90% of the crypto mined each day. A more realistic estimate would be one hash per day, even with the most potent mining computer in the world.
How Risky is Trading in the Cryptocurrency Market?
Cryptocurrency trading is a volatile business. The market is at the mercy of rapidly shifting factors. If traders buy in high volumes, the coin’s price increases, and you earn profits from your initial investment. On the other hand, the natural market response is a price drop if they sell in bulk. In cryptocurrency, this price movement is predominantly influenced by speculation and can be manipulated by people like Elon Musk.
However, the fact remains that when the market moves, the price changes tend to be very significant. Take Bitcoin, for example. In March 2020, when the world declared the first lockdowns, its price was $5,000. The halt in trading caused by the quarantines and the ensuing drop in the value of most investments influenced most investors to store their money in gold and cryptocurrency. By December 2020, Bitcoin’s value had risen 600% to $30,000.
However, this volatility goes both ways. In May 2021, China declared restrictions on crypto mining within its jurisdiction. The price immediately plunged from $65,000 in April to below $30,000 in response.
How Much Do You Need to Trade Crypto?
No standard minimum deposit exists for those wanting to start cryptocurrency trading in the Philippines. However, each platform sets its thresholds for beginners.
The most common crypto wallet used in the Philippines is Coins.PH. The app allows users to convert their PHP balance to digital currencies like Bitcoin, Ethereum, XRP, and many others directly from their wallet. You have absolute freedom in your trading amounts – you just cash in whatever amount you’re comfortable buying.
On the other hand, Coinbase specifies an initial deposit of $50. Given the current exchange rate of PHP56 to USD$1, that would be around PHP2,800.
There’s no limit to how much you can invest and trade cryptocurrency in the Philippines. You can trade higher amounts and earn higher profits, like stock trading and forex trading. However, you also face more risk than those buying crypto at lower denominations.
How Much Can You Make From Crypto Trading?
Cryptocurrency is considered a high-yield, high-risk investment. This means that price movements can exceed 100% when certain factors are present. As mentioned above, the price in 2020 increased six times due to the financial meltdown caused by the pandemic. If you invested $1,000 in Bitcoin before the COVID-19 crisis, you could’ve earned $5,000 in profits by December 2020.
What Does the Future Hold for Cryptocurrency?
There have been numerous changes to the cryptocurrency landscape in the past decade. Bitcoin is now nearing the end of its supply line, and many alternate coins like Litecoin and Doge are populating the market. Once a cash cow open to everyone, crypto mining in the Philippines is now restrictive and expensive to get into.
Despite these changes, the crypto market is poised for further growth. This is because of the shifting attitude of the public and the authorities toward the alternate currency. For instance, Bitcoin is now accepted as legal tender in countries like El Salvador. This marks potential growth in transactions involving Bitcoin, which, in turn, will also drive growth in the sector.
Because of these, Allied Market Research estimates a triple growth in the global cryptocurrency market by 2030.
Making money from cryptocurrency in the Philippines is expensive, risky, but very rewarding. Not all Filipinos may be able to join that market, but those who can do so are in for treats. In other words, there’s plenty of money to be made from either cryptocurrency mining or crypto trading. If you’re interested in creating a business out of cryptocurrency, you could consider the best personal loans in the Philippines as a funding source. If you’re qualified, you can borrow money that you can use to set up your crypto mining rig!