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How does commodity roll yield affect the profitability of cryptocurrency mining?

avatarHaahr SehestedDec 26, 2021 · 3 years ago1 answers

Can you explain how the commodity roll yield impacts the profitability of cryptocurrency mining? I'm curious to understand the relationship between these two factors and how they influence each other.

How does commodity roll yield affect the profitability of cryptocurrency mining?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    Commodity roll yield can have a significant impact on the profitability of cryptocurrency mining. When the roll yield is positive, miners can take advantage of the price difference between the current and next futures contracts to increase their profitability. They can sell their mined cryptocurrencies in the futures market at a higher price and then buy back the contracts at a lower price, making a profit from the price difference. However, if the roll yield is negative, it means that the next futures contract is priced lower than the current one, which can reduce profitability. Miners may need to hold onto their mined cryptocurrencies until the roll yield becomes positive again before selling them for a higher price. Overall, the commodity roll yield is an important factor that miners need to consider when assessing the profitability of their mining operations.