Chill Guy is a viral meme illustration that took social media by storm before a crypto project used the meme to launch a Solana-based token. Learn more here.

What started as a simple illustration of a laid-back dog has become a global meme sensation, with the cartoon character known as Chill Guy dominating both social media trends and cryptocurrency markets. Created by artist Phillip Banks in October 2023, the easygoing canine character sparked a viral movement that has attracted major brands worldwide.

This article follows Chill Guy’s transformation from a social media sensation to a cryptocurrency asset. We'll examine its viral beginnings, community growth, market impact and what potential investors can expect from CHILLGUY in the future.

 is a viral meme illustration by artist Phillip Banks, depicting a laid-back dog in casual clothes whose easygoing attitude took social media by storm before a crypto project used the meme to launch Just a Chill Guy as a Solana-based token.

What Does Just a Chill Guy Aim to Achieve?

The CHILLGUY meme coin aims to spread a "Why worry?" philosophy into cryptocurrency markets by embracing the laid-back, stress-free attitude that made the original meme go viral. The project transforms this easygoing vibe into a community-driven token, where being low-key isn't just a catchphrase — it's a shared mindset among holders.

The CHILLGUY community brings this philosophy to life by sharing endless variations of the CHILLGUY meme across social platforms. Through market swings and viral trends, CHILLGUY keeps his iconic pose: hands in pockets, subtle smirk, perpetually relaxed.

Just a Chill Guy (CHILLGUY) operates as a Solana Program Library (SPL) token on the 

 blockchain, leveraging the network's ultrafast speeds and low costs to ensure smooth trading. The token was created using Pump.fun, a specialized platform that lets users launch Solana-based tokens without any fees, removing traditional barriers to token creation.

CHILLGUY is a community takeover (CTO), meaning it's completely owned and directed by its token holders with no central team in control. This decentralized structure ensures the project stays true to its community-driven nature, its holders collectively guiding its future while embodying the laid-back spirit of the original meme.

The CHILLGUY token launched with a maximum supply of 1 billion tokens, of which 999,965,435 are currently in circulation. This near-complete distribution of tokens to the market supports active trading and community participation.

What makes CHILLGUY's tokenomics particularly notable is its widespread distribution across more than 142,000 unique holders (as of Nov 27, 2024), achieved in just 12 days. This rapid expansion of its holder base demonstrates strong community adoption and aligns with the project's decentralized, community-driven principles.

CHILLGUY has exploded across social media, especially on TikTok, where the meme has amassed hundreds of millions of views. Its laid-back character resonates with users worldwide, inspiring countless creative adaptations.

Major brands worldwide have embraced CHILLGUY in their marketing campaigns. From Sprite Europe to NFL on CBS, the character has resonated across mainstream media, even catching the attention of global figures like El Salvador's president Nayib Bukele.

The “Chill Guy” meme’s influence spans multiple social media platforms, with a growing community of followers: 96.6K on X (

). On the other hand, the meme token itself also has a vast community, with 39.9K on X (

) and an active Telegram channel of over 15,000 members. These numbers reflect the meme's ability to engage audiences across different platforms.

The token's popularity in cryptocurrency markets matches its social media success, with CHILLGUY maintaining a substantial 24-hour trading volume of over $330.03M as of Nov 27, 2024. This high trading activity demonstrates the strong market interest in CHILLGUY beyond its meme status.

Looking to trade Just a Chill Guy tokens? Bybit now offers the CHILLGUY/USDT Spot trading pair and CHILLGUYUSDT Perpetual contract. To get started, you’ll first need to create a Bybit account, then fund it with cryptocurrency and navigate to the 

While CHILLGUY has maintained strong trading volumes and continues gaining mainstream attention through its viral social media presence, investors should carefully weigh its strengths and risk factors before making investment decisions.

With its widespread brand adoption, sustained trading activity and explosive community growth of over 142,000 holders, CHILLGUY demonstrates significant market potential. However, meme coins are inherently volatile. Potential investors should 

 and invest no more than they can afford to lose.

CHILLGUY is the latest viral sensation to harness the power of the attention economy to convert social media momentum into crypto market success. While CHILLGUY has already demonstrated its ability to capture mass appeal, its position as a leading meme token will depend upon how effectively it maintains its cultural relevance and community engagement in this fast-moving market.

Intermediate

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Just a Chill Guy (CHILLGUY): Embracing the Art of Nonchalance

Zircuit (ZRC) combines optimistic and ZK rollups with AI-driven security, offering fast, low-cost Ethereum Layer 2 solutions. 

 network has flourished, mainly due to the ongoing network congestion, high fees and poor scalability of the latter. Many of these platforms use rollup technology, whereby batches of multiple transactions processed off-chain are bundled together and posted in bulk to the underlying Layer 1. Ethereum-linked rollups mainly come in two varieties 

 (ZK). While optimistic rollups boast lower computational overhead, the ZK variety of these networks features a higher degree of security.

Zircuit (ZRC) is a Layer 2 chain that adopts a hybrid approach, combining the elements of optimistic and 

. This lets the platform offer the performance benefits of optimistic technology along with the security of ZK validity proofs. To further enhance overall security, Zircuit uses a unique 

 (AI)–driven system of monitoring for malicious transactions.

 (ZRC) is a hybrid Layer 2 blockchain that combines the features of optimistic and ZK rollups, and uses AI-driven monitoring for potentially harmful transactions. 

 rollup development technology, a popular framework for building optimistic rollup networks. Additionally, it uses zero-knowledge proofs, which lets the platform offer the best of both worlds 

 the performance benefits of optimistic rollups and the security of ZK technology. Zircuit is 

The Zircuit project takes security very seriously, and has introduced a unique system of AI-based protection against malicious transactions at the sequencer node level. The use of ZK proofs and an AI-based protection system make Zircuit one of the most secure platforms in the competitive world of Ethereum Layer 2 chains.

Along with its excellent security benefits, Zircuit also boasts low costs, fast transactions, excellent scalability and 2-second block production intervals. All these features make it an ideal environment for 

 (DApps) in various niches, particularly 

 (DeFi). In fact, the leading protocols within the Zircuit ecosystem are all dedicated to the finance niche, with Zircuit Staking being the largest application by TVL.

With its heavy focus on DeFi, Zircuit aims to become a leading liquidity hub for various token types within the sector, including 

. These assets can be staked through the Zircuit staking program — supported by the platform's Liquidity Hub — to earn staking APRs, airdrop rewards and points based on the Zircuit Point program (covered further in our article).

The platform also operates a secure native bridging solution, 

, to help users transfer assets between its Layer 2 network and Ethereum Layer 1.

The company behind the project, Zircuit Ltd., was founded in 2021 in Canada by Dr. Martin Derka, Jan Gorzny and Angel Xu. Zircuit's testnet was launched in November 2023, but made headlines in April 2024 when the project reported that its 

 (TVL) had soared past $2 billion. While testnet TVLs are more a gauge of future potential for a blockchain than an indicator of its existing worth, the news attracted the attention of industry observers toward the platform. Following its highly publicized testnet success, Zircuit launched the first phase of its mainnet in August 2024. This was followed by the launch of the platform's native token, ZRC, in November 2024.

As a typical rollup, Zircuit uses an off-chain sequencer node to batch and organize Layer 2 transactions for subsequent posting to the underlying Ethereum Layer 1. The batches have ZK validity proofs attached to them to signal to Layer 1 validators that they’re free from fraudulent transactions. Zircuit's architecture also includes prover nodes, whose job is to produce these validity proofs.

However, unlike other rollups using ZK proofs (also known as validity proofs), Zircuit doesn't generate validity proofs for every block of transactions. Instead, some blocks have pre-generated template proofs, while others go through the process of having a dedicated validity proof created for them. After a few blocks featuring validity proofs, there are several more that utilize template proofs. The image below illustrates this approach.

The key reason Zircuit has adopted this form of proof design is that the process of generating ZK proofs is computationally intensive. By using template proofs for some of the blocks in a sequence, Zircuit can reduce the overall computational overhead. However, the project’s team has stated that the template proof model is temporary, and will be phased out in the future. At that stage, the platform will move to generating ZK proofs for each block.

Zircuit features a highly modular design whereby provers — responsible for generating validity proofs on the platform — can easily be plugged into or removed from the network. This modular approach is distinct from the standard ZK rollup design, in which provers are more tightly and less flexibly integrated into the overall architecture.

As noted earlier, Zircuit uses a dedicated sequencer to organize and batch transactions into blocks. The platform also applies AI-driven monitoring at the sequencer level (the Sequencer Level Security, or SLS) to spot and exclude fraudulent transactions before they’re finalized on Layer 2.

When transactions are first posted to Zircuit, they enter the 

 — a temporary area from which the sequencer picks and organizes individual transactions into blocks. The mempool is being monitored at all times, using AI algorithms to identify suspicious transactions. If a transaction in the mempool raises a flag, it's quarantined and assessed for validity before the sequencer can include it in a block. The image below shows how this process works.

One of the distinct features of Zircuit is its hybrid architecture, which combines the properties of optimistic and ZK rollups. At the base level, Zircuit is built using Optimism's Bedrock development framework, a technology popular for optimistic rollup networks. However, the use of ZK proofs — or, to be more precise, a combination of validity proofs and template proofs — ensures that Zircuit enjoys a security level that standard optimistic rollups normally can't match.

The use of AI-based SLS provides robust security to Zircuit, complementing the already highly secure ZK proof system. Very few Layer 2 networks in the industry currently feature anything similar, making the platform a true pioneer of AI use for sequencer-level operations.

Like any rollup based on Optimism Bedrock, Zircuit enjoys EVM compatibility. This allows for smooth interoperability with the underlying Ethereum Layer 1. EVM compatibility also makes it easy for developers familiar with Ethereum’s environment to develop Zircuit-based DApps, or to port existing Ethereum applications to the platform. Developers can take advantage of technologies commonly used for Ethereum (e.g., the Solidity programming language and the Hardhat development framework) to build Zircuit applications and smart contracts.

Zircuit Bridge is a native bridging solution designed to easily transfer tokens between Ethereum and Zircuit. It boasts high security, low transaction fees and fast transfers, and allows users to move a variety of cryptocurrencies between Ethereum and Zircuit, including ETH, 

) and LRTs like Super Symbiotic LRT (weETHs). As of late November 2024, the total number of cryptos supported by the bridge is close to 30.

Zircuit has launched a reward program called Zircuit Points. Users can earn these Points by staking supported assets, and by participating in the Build to Earn initiative (more on this below). Accumulated points will be converted to ZRC tokens in the future. Points also create the opportunity to qualify for token airdrops.

The primary way for most users to earn Zircuit points is via 

. The Zircuit Staking program lets you stake LSTs, LRTs, popular stablecoins, some wrapped tokens and Ether (ETH) to earn points. Using LSTs and LRTs, you can earn yields (along with native Zircuit staking APRs and Points) from the respective staking and restaking platforms that issue these assets.

Zircuit Points earned via staking have different multipliers, depending upon the asset. For example, Ether has a multiplier of 0.5, while LSTs, LRTs and stablecoins have a multiplier of 1. Multipliers for different LST and LRT assets may be subject to change in the future.

Build to Earn is another way to qualify for Zircuit Points. The program allows developers to contribute to the Zircuit ecosystem and earn Points in a number of ways, including:

Launched in November 2024, ZRC is the platform's native cryptocurrency. It's an 

 asset deployed on both Zircuit and Ethereum Layer 1. ZRC is mainly used for reward distributions, and participation in token airdrops for ecosystem DApps. Currently, transaction fees on the network are paid in Ether. It's possible that, in the future, ZRC might be used for some transaction fee payments.

ZRC is also used for rewards under the Gas Rebate program. As users conduct transactions on the platform, they 

. Zircuit’s Gas Rebate program provides rebates to offset some of the incurred fees. The amount of ZRC earned as a rebate is proportional to the amount spent on gas in ETH; the project's documentation states that for each ETH spent on gas, the user earns 125% in ZRC. All kinds of gas fee payments qualify for the rebate, including ordinary asset transfers and transactions involving interaction with Zircuit DApps.

ZRC is a supply-capped token, with a maximum and total supply of 10 billion. The token's supply allocation shares are as follows:

The ZRC token is available on Bybit's Spot market as a swap pair with USDT (

 to grab a share of the 5 million ZRC prize pool. New users who sign up for a Bybit account and complete identity verification can earn ZRC rewards by accumulating a deposit volume of at least 2,000 ZRC, or by depositing 100 USDT and trading 100 USDT worth of ZRC via their first trade with Bybit. 

Meanwhile, existing users can qualify for ZRC rewards by trading at least 500 USDT worth of ZRC on the Bybit Spot market, with the possibility of earning up to 10,000 ZRC based on trading volume. The 

 event will run through Dec 10, 2024, 8:59AM UTC.

Zircuit is among the pioneering Layer 2 platforms to adopt a hybrid design for a rollup network. Thanks to the platform's architecture, users can take advantage of low transaction costs, fast transfers and great scalability while enjoying the benefits of high security delivered by ZK proofs and AI-driven mempool monitoring. AI-based monitoring for fraudulent transactions is a particularly notable feature of the platform and is undoubtedly among the most advanced technologies employed in the blockchain industry.

User security combined with faster and cheaper transactions for the Ethereum network — all in one package — is now feasible, thanks to Zircuit's innovative technology and unique approach!

Advanced

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What Is Zircuit (ZRC): Where Performance Meets Cutting-Edge Security

Bybit is celebrating its sixth anniversary with the #Super6Bybit event, offering a $1.2 million prize pool and focusing on its bbSOL token.

Daily Top Performer — Virtuals Protocol (VIRTUAL)

On Wednesday, the S&P 500 fell 0.38% as tech stocks dropped and inflation data reinforced a hawkish Fed outlook. Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 0.40%, with Bitcoin and Ether dropping by 1.86% and 1.79%, respectively in the past 24 hours.

Today's top performer is VIRTUAL, which surged 53.6% following the launch of the $MUSIC token by Agentstarter, featuring AI-driven music video capabilities and community-focused tokenomics.

Virtuals Protocol (VIRTUAL), founded in 2021, allows users to invest in and co-own AI-driven virtual assets like companions and influencers. Its model fosters community ownership, transforming AI agents into revenue-generating assets across platforms like Roblox and TikTok. The platform attracts contributors from AI and gaming to drive innovation in virtual economies. 

, using AI to create music videos and offering features like animated videos, voice mimicry, and karaoke tracks. The tokenomics allocate 60% for airdrops, 20% for liquidity, and 10% each for the development team and Virtuals Protocol.

Check Out the Latest Prices, Charts, and Data of 

Bybit is celebrating its sixth anniversary with the 

, offering a $1.2 million prize pool and focusing on its bbSOL token. Launched in September 2024, bbSOL is the first exchange-backed Liquid Staking Token on Solana, providing liquidity and staking rewards. The campaign, running from November 28, 2024, to January 6, 2025, invites participants to build, transform, and supercharge their bbSOL through tasks, leaderboards, and community milestones, increasing rewards. The event combines gaming mechanics, community engagement, and opportunities to win prizes while promoting innovation and growth in the crypto space.

Yesterday, there were no flows in BTC Spot ETFs, including GBTC and non-GBTC categories.

. Stake BNB on Lista's portal to get slisBNB, then deposit it into Astherus to earn airdrop points with multipliers (3X for Lista, 1.15X for Astherus). No lockup is required, and slisBNB is the most efficient option.

Beginner

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Bybit Celebrates 6th Anniversary with $1.2M Prize Pool and bbSOL Supercharging Campaign

Our weekly crypto derivatives analytics report delves into macro events, the current state of crypto and trading signals from spot trading volume, and futures, options and perpetual contracts.

ETH has outperformed, bolstered by SEC Chair Gary Gensler's announcement of his Jan 20, 2025 departure, and suggested by growing open interest in ETH perpetual. This positive momentum extends to several large-cap altcoins previously scrutinized by the SEC, as indicated by bullish funding rates for long positions.

Please check out the report’s highlights.

ETH Open Interest Grows While BTC’s Declines

ETH is outperforming BTC following the announcement of SEC Chair Gary Gensler’s departure, as evidenced in perpetual swap markets. BTC open interest has decreased from last week's highs, while ETH contracts have increased. Additionally, ETH trade volumes constitute a larger share of daily trading as compared to much of the past six months, despite an overall dip in trade volumes this week. The gradual decline in BTC open interest, without a surge in trading activity, indicates a strategic repositioning, rather than a wave of liquidations.

BTC Option Curve Inversion Deepens as Price Retreats

The pullback in the spot BTC price from the $100K target has led to a flat ATM volatility term structure, with short-tenor options dropping below 60%. 

This trend continues the correlation between term structure inversion and BTC spot price returns observed since the U.S. election on November 5, 2024

. The decline in front-end volatility aligns with lower realized volatility levels. While demand for short-tenor options has moderated, there hasn't been a notable change in open interest for calls or puts. Instead, their growth has stalled at the week's start.

Sentiment in ETH options markets seems moderately more bullish than in BTC's during the recent decline in momentum from the post-election rally. Call options lead in both trading volumes and open interest. 

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Bybit X Block Scholes Crypto Derivatives Analytics Report (Nov 27, 2024): Signal on ETH Outperformance Against BTC Surfaces on Long-Term Contracts

Investing

Trading

Interested in crypto mining stocks? From share dilution to potential bankruptcy, here's why it's better to buy the cryptocurrency instead.

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When it comes to mining Bitcoin, crypto mining stocks immediately come to mind given how often they appear on headlines. Droves of miners operate behind the scenes to confirm transactions that have pushed Bitcoin to nearly $900 billion in value (as of mid-September). They are an essential piece of blockchain consensus, creating new bitcoins from scratch by solving complex cryptographic puzzles and verifying transactions on the blockchain. 

Commodities like oil and gold have upstream and downstream components, which start at the beginning of the extraction process and end downstream with refined products. Trading and investing in Bitcoin mining companies is similar to investing in upstream commodity markets. 

The companies behind Bitcoin mining stocks either offer crypto mining hardware, or mine the cryptocurrencies themselves.

Investors trade crypto mining stocks to take advantage of the high volatility and growth in the sector while harnessing the leverage available. However, the unusually high volatility is a double-edged sword, because the bottom can fall out on these stocks far more quickly than with any digital coin. 

We’ll take you through the lesser-known risks of crypto mining stocks so that seasoned investors can make an informed decision.

Investors buy the best Bitcoin mining stocks because as digital assets like Bitcoin and Ether rise in value, cryptocurrency mining stocks also climb. Investors capitalize on leveraged stock market trades without actually owning any cryptocurrency. 

Bullish surges and leaps in Bitcoin and other cryptocurrency prices, as well as increased demand and distribution, mean that stocks associated with cryptocurrencies also start attracting attention. You can compare trading crypto mining stocks to trading gold shares. There’s no actual gold ownership, but the value of large gold mining enterprises reliably moves in line with the price of gold. Similarly, crypto mining stocks tend to fluctuate relative to the value of crypto assets. 

One reason to invest in crypto mining stocks is that most retirement accounts won’t allow adding cryptocurrencies to your retirement portfolio. A way around this is to buy Bitcoin mining stocks. That way, you expose your portfolio to the potentially massive upside of investing in cryptocurrency, albeit indirectly.

Leeor Shimron, a member of the Business Development & Strategic Partnerships Team at Kraken, refers to Bitcoin mining shares as a “high beta play” due to the way public mining companies rose 5,000% on average during the last bull run, when Bitcoin climbed 900%. His analysis reveals that Bitcoin mining stocks

. In certain cases, crypto mining stocks can outperform the underlying cryptocurrency mined. 

Historically, mining pools in China have controlled the majority of Bitcoin’s hash rate. China manufactures most of the world’s mining equipment, and mining farms have used cheap electricity prices there to build up a large presence. Due to the recent ban on cryptocurrency mining in China, numerous opportunities for miners in North America and the rest of the world to make huge profits have opened up. At the same time, companies are mining more bitcoins than ever, since it’s now easier, due to the downward difficulty adjustment resulting from the expulsion of Bitcoin miners from China.

Investors holding a significant stock market portfolio who qualify for margin trading effectively trade cryptocurrency mining stocks as a leveraged bet on the underlying cryptocurrency’s rise in value. While the logic behind this strategy works, many investors don’t realize how volatile mining stocks can be. A managed corporate crypto mining pool can shut down overnight if its holding company decides the expense is no longer worth it. They can decide to simply liquidate all assets, and move on to another investment. Or — in the case of Chinese miners — regulatory action can lead to a crackdown. Buying Bitcoin mining stocks comes with significant risk.

Cryptocurrency popularity is accelerating and, with it, the demand for mining. According to an

report, “the size of global cryptocurrency mining activities is projected to reach [$258 billion] by 2026, from [$102 billion] in 2020, at a 

 of 16.8% during 2021–2023.” In addition, the total value of all crypto surpassed $1 trillion in early 2021. 

What Are the Risks Of Crypto Mining Stocks?

Investors are attracted by returns. Crypto mining giants Marathon Digital Holdings (MARA) and Riot Blockchain (RIOT) are two clear examples of how Bitcoin mining stocks can outperform the growth of Bitcoin itself. In 2021, Marathon stocks have climbed 165%, and Riot has grown by 65%, whereas Bitcoin has only been up by about 30% in the same space of time. Even though MARA has plans to deploy over 75,000 more miners by the end of the year, with 15,200 more coming in January 2022, the company is not yet profitable. 

RIOT, on the other hand, reported a considerable gross margin of 67.6% during the first quarter of 2021. Despite massive investments and a fairly steady rate of return at the moment, there’s no guarantee that mining companies will continue to meet their profitability projections. Miners purchase expensive hardware, acquiring the world’s highest-powered semiconductor chips based on the expectation that prices are going to follow a particular trend over the next three to five years. During this period, energy prices can fluctuate, and buying new mining equipment will grow more expensive. If this offsets projected returns, crypto mining stocks could collapse. 

Trading Bitcoin and Ether mining stocks is a risky endeavor. Without assessing the risks of crypto mining stocks, many investors find themselves taking on far too much volatility while entering trades, without a clear assessment of where the market may be moving. 

Here’s a breakdown of a few risks to be aware of. 

High Upfront Cost Can Result in Operational Inefficiencies

In the “early” days of Bitcoin, it was possible to create or “mine” bitcoins on a home computer. Since then, the race to mine bitcoins has led miners to use increasingly sophisticated and expensive hardware. Prices on specialized mining hardware have surged as miners compete with gamers for equipment. Miners have also pooled resources and created mining companies to get the most out of their mining production.

Bitcoin mining companies need to make massive investments into high-end processors and semiconductors to mine cryptocurrencies. This high upfront cost is worsening with the global semiconductor shortage that’s driving mining hardware prices up. With a lack of hardware, mining wouldn’t be as efficient. At the present moment, mining companies are acquiring graphics cards well before gamers do. Between these two markets a massive shortage is arising.

The cryptocurrency boom has already hiked up semiconductor production to the point where there are now more powerful 

 than ever. Unfortunately, the global scarcity of semiconductors has driven the costs even higher. Now, even mid-range cards are out of reach for the average gamer. Should hardware shortages continue to wreak havoc on the industry, causing mining hardware prices to skyrocket, mining could quickly end up at the point where it’s simply not worth it as an investment anymore. 

Huge Energy Consumption And Carbon Footprint from Mining

To keep operating costs low, cryptocurrency mining companies need to find cheap energy sources. These tend to be fossil fuels and natural gas, which can cause plenty of greenhouse gas emissions and lead to huge carbon taxes down the road. Carbon taxes already play a major role in

, and are set to increase as natural resources diminish. Only time will tell whether crypto mining companies will be able to sustain the massive fees imposed.

With carbon emissions of over 77.54 megatons of CO2, which is currently comparable to that of New Zealand, and electronic waste equivalent to that of the Netherlands, critics are coming down hard on the resource consumption of cryptocurrencies. After all, the mining

 for one Bitcoin is 191 tons of carbon dioxide, whereas the equivalent mining value in gold only equates to 13 tons. 

Before the crackdown on crypto, China hosted

 of all the miners in the world. One of the reasons for this was China’s low-cost renewable energy, specifically hydroelectric energy. Hydroelectric dams produce excess energy in the rainy season, which drives down energy costs significantly. After the rains, the miners have reverted to coal or whatever source of energy that’s cheapest. 

Non-PoW (proof of work) coins currently comprise

. There’s a movement away from consensus algorithms with huge energy consumption and large carbon footprints, which could theoretically decrease the popularity of Bitcoin and begin a vicious cycle in which prices drop and miners make even less profit. 

Introduction of New Blockchain Technologies May Affect Mining

While the current consensus algorithm of Bitcoin is unlikely to change in order to lower energy and carbon emissions, other cryptocurrencies are addressing the issue. Ether mining stocks currently hinge on power-hungry consensus algorithms, but Ethereum 2.0 will soon transition from proof of work to proof of stake (PoS). Crossing over to PoS could make ETH 2.0 considerably more efficient than it currently is.

With PoS, gone is the need for mining equipment that requires massive computational power. A combination of 

 and PoS can lower the carbon footprint of Ether to a fraction of its current resource draw. As currencies like Ether evolve, mining could become redundant for many coins and tokens. The effect on mining share prices would be devastating, and no one truly knows the time frame of adoption and rollout with any degree of certainty.

Sudden crashes in the coins that are being mined can cause big swings in overall revenue, which can ultimately determine whether a crypto mining company can stay afloat in the long run. This makes mining companies even more vulnerable, especially in light of potential government restrictions and clampdowns. Should cryptocurrency markets stay bearish for too long, crypto mining companies could quickly decide to shift their investment elsewhere and cut their losses, instead of struggling to keep up with costs and regulations. 

 have gained more than 6,000% since the start of the year, they can also plummet in value. Bitcoin skyrocketed from a high of $60,000 in April 2021 to under $30,000 in July. While it’s steadily retraced to just over $45,000 by mid-September, an excessive fall in value could forecast doom for many crypto mining companies, forcing undercapitalized miners to abandon operations.

Unlike investment in Bitcoin, for example, your holding in a crypto mining company can be reduced when the company issues additional shares out of the blue. This process is known as share dilution, and happens when mining companies try to raise funds for expansion. When a company dilutes its shares by issuing additional ones, the value of existing investors’ shares and their proportional ownership of the company are reduced.

Crypto mining companies operate similarly to traditional ones, with ownership structures and centralized management. Unlike with cryptocurrencies, there is no path to truly decentralizing management of operations. This leads to the consolidation of power — along with the potential for abuse.

Since it’s traditionally structured, a crypto mining company can declare bankruptcy when it runs out of funds. This requires liquidation of any assets, with any remaining value going to creditors first. Shareholders have the lowest priority in the capital structure, meaning that they’re the last to get any money back from the liquidation of a company. This makes holding crypto mining stock potentially more risky than holding a cryptocurrency that benefits from collective belief in an asset.

Trading cryptocurrency mining stocks isn’t easy, especially when one begins to invest in small-cap stocks.

 are easily influenced by the hype and market movements of groups of traders. With the right timing, early investors made fantastic returns in just a few short months, but opportunities like this are few and far between. Risky, early-stage investment saw quick returns, but those who didn’t realize when to sell off and move on would have done far better in a market they understood.

The difficulty of scaling and the rising cost of hardware — combined with rising regulation — create uncertain market conditions. Miners invest in ASIC rigs and other high-end mining equipment, relying on an estimated revenue rate based on their 

. Not all companies can keep up with the immediate costs, and while their computational power may be there, changes within the crypto space can lead to expenses smaller companies can’t afford.

The cryptocurrency mining industry is still relatively new. You have far more people owning crypto than mining crypto, and little is known about the future of related industries. Conventional stocks are connected to companies and movements which have been charted and studied relative to competitors for years. However, cryptocurrency’s future is uncertain, which is largely responsible for the prevailing volatility. A lack of basic comparative measures between new mining companies makes gauging investment viability extremely difficult.

There’s very little to go on when analyzing the viability of new miners, other than the basic hash rate offered and the share price. Before China’s crackdown on cryptocurrency, which banned initial coin offerings and cryptocurrency mining, the country was a haven for startups. Companies like Bit Digital, Inc. are now forced to find

. If local regulation and tariff structures around the world change too much in the coming years, miners may be forced to shut down operations completely. 

Cryptocurrency mining companies have fixed costs which allow for fairly reliable revenue projections.

 that in the $16 billion dollar Bitcoin mining market, around $5 billion is spent annually in mining costs for Bitcoin mining companies, which leaves the miners taking roughly $11 billion in profit. This doesn’t mean, however, that the share price of mining companies will remain stable.

The recent ban on cryptocurrency mining in China uprooted countless mining companies, creating an unexpected and unforeseen expense. We have yet to see the effect of moving thousands of mining machines to new countries — and even after crypto mining share prices adjust, they’ll take time to find their new place amid the new infrastructure. New regulations and changes within the industry create unstable share prices that are hard to predict.

Crypto mining stocks offer investors a leveraged bet against the price of Bitcoin. However, Bitcoin mining involves a significant amount of risk, both financial and regulatory. High up-front costs that crypto mining companies have to pay for specialized equipment expose them to operational inefficiencies, and huge energy consumption and carbon footprint draw significant negative attention. The inherently volatile nature of crypto is often magnified in crypto mining stocks. 

Many seasoned investors still prefer Bitcoin and Ether as long-term investments. The U.S. investment sector is eagerly awaiting any 

 approval by the SEC. The United States’ last application was filed by

. Whether they’ll end up approved or not remains unknown, but investors are confident that it’s just a matter of time before a Bitcoin ETF will be approved. Until then, investing in Bitcoin and other cryptocurrencies is a far more stable strategy than unpredictable, high-volatility cryptocurrency mining shares.

The Lesser-Known Risks of Crypto Mining Stocks

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