KYC and Banking Issues:
Over the years, banks have had a tricky relationship with Bitcoin. Bank of America, Wells Fargo, US Bank, JP Morgan have shut down accounts for clients for dealing with Bitcoin and crypto related products without any explanation. Even when banks don’t outright shut the accounts, the KYC process to spend one’s own funds can be heavily scrutinized placing spending limits.
See major U.S. banks tightening crypto policies and closing accounts and banks banning crypto business accounts.
On the other hand, mining hardware can be purchased with fiat without any KYC and hosted without any such issues allowing a steady dollar cost averaging into Bitcoin.
Exchange Loss Risk:
From Mt Gox to FTX, there have been numerous hacks and breaches of central exchanges resulting in billions of dollars of losses for investors. There’s a saying “Not your keys, not your coins.” Self custody removes the middleman risk of losing your precious Bitcoin.
Phishing attacks and Coinbase:
Counterparty and data breach risks are a major issue to the sovereignty of holding Bitcoin. As recent as May 2025, Coinbase employees were involved in a vast breach of customer information which put Coinbase customers at major risk of targeted theft and burglary. Mining in your house or a competent industrial scale facility provides additional privacy.
Read more about the May 2025 Coinbase breach involving bribed support contractors leaking customer data, paired with reports on the $20 million ransom demand and $180–400 million estimated cost that saw a stock drop ahead of its S&P 500 inclusion.
Stable DCA Strategy:
Bitcoin can often be volatile and there can be periods of wild swings. Mining removes the emotional aspect of trading while maintaining a steady disciplined approach of accumulating Bitcoin.
Tax Benefits:
With the bonus depreciation back on the White House agenda, Bitcoin miners are set to gain by offsetting the cost of hardware against their income. Not financial advice, but the benefits are pretty clear in the bill as mining hardware qualifies as business machinery.
Bull Case for mining:
Usually in a bull market, the hardware appreciates just as fast if not faster than the underlying coin itself. Its hard to time the market but time in the market with hardware provides multiples vs just buying and holding Bitcoin.