Feasibility Study on Bitcoin Mining Investment
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Abstract
The purpose of the study is to analyze an economic return on investment, including Economic Value Analysis in Bitcoin mining investment. The study was divided into 2 parts, investment in Bitcoin mining in 2016 – 2018 and sensitivity analysis of investment in Bitcoin mining in 2018-2020. The research is processed by collecting the primary data from investors’ interviews in 2018 as well as retrieving the secondary data from internet resources in order to create the equation with predicting Bitcoin mining volume and income.
According to the study, it found that making an investment in 2016 - 2018 is the period when Bitcoin is the most expensive and attractive. The results of economic value analysis through 3 indicators, including Net Present Value (NPV), Internal Rate of Return (IRR) and Discount Payback period (DPB). The result showed that if you invested in 2016 to 2018 by doing day-to-day sales, there would be no economic value for investment. However, regarding to analyze the strategic sales by selling when the Bitcoin price is 20% higher than the average cumulative cost per unit, it is economically worth the investment. With this strategy, the Pay Back Period for the investors will be within 3 years as assumed. Regarding the sensitive testing of investment in Bitcoin mining in 2018-2020 by determining price changes and difficulty value in 2019-2020. The research found 3 cases compose of the cases of increasing Bitcoin price and the difficulty value increased, increasing Bitcoin price and the difficulty value is stable and increasing Bitcoin price and the difficulty value decreased. If the investor make a strategic sale at a Bitcoin price 20% higher than the average cumulative cost per unit, it is economically worthwhile to invest.
Keywords: 1) Cryptocurrency 2) Bitcoin 3) Bitcoin Mining 4) Investment
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References
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