Crypto Meltdown Forces a Significant Drop in the Prices of Mining Rigs

It would seem that the sustained slump in the global cryptocurrency market has forced suppliers of Bitcoin mining hardware all over the world to discount the prices of their machines, per reports on the South China Morning Post (SCMP).

Steven Mosher, a representative of Canaan Creative, the second largest manufacturer of cryptocurrency mining rigs in the world, is already selling off its Avalon-brand equipment at $200 per unit. The flash sale organized by Canaan on Friday marked a major discount programme for the China-based company, which used to sell the AvalonMiner 921, its most powerful crypto mining rig model, for $742.

Mosher spoke to the news outlet via email where he likened the slash in prices to a form of “Black Friday” deal.

“You can think about this price markdown as me rescheduling Black Friday by a week.”

The downturn in cryptocurrency profitability amidst low Bitcoin prices is affecting Bitcoin miners. F2Pool founder, last week said he believes over 600,000 Bitcoin miners had shut down their mining operations since the prices of cryptocurrencies tumbled.

“We are entering in the phase when there’s a flushing out of the market. There will be relatively few operations that come out of the other side,”

Malachi Salcido an executive at Salcido Enterprises, one of the largest Bitcoin miners in America, explained in a Bloomberg report.

For most miners, Bitcoin needs to trade above $4,500 for them to make a profit. With the current plunge in prices, about 100,000 mining rigs have been shut down, Autonomous Research LLP. Fundstrat Global Advisors LLC, noted in the report. Data from F2pool’s miner revenue index also confirms this, but it seems the bulk of miners that have ended their mining operations includes those using older mining rigs such as Canaan’s AvalonMiner 741, which runs on a maximum hashrate of 7.3TH/s consuming 1150 Watts of power. At the moment, miners running this mining rig are losing $2.30, according to miners income estimation site ASIC Miner Value.

The entire hashrate of the Bitcoin network has dropped as well. Data from blockchain.info shows a 13 percent decline in the aggregated computing power on the blockchain, falling from 47 million TH/s to 41 million TH/s.

Mining Rigs Sellers

At the Huaqiangbei sub-district in China, known as a major electronics hub, mining vendors are feeling the ripple effect of the crash in the value of cryptocurrencies. For some of the shopping centers in the district dedicated to crypto hardware sales, only a few shops remain open for business, from the hundreds that were previously selling cryptocurrency mining rigs.

At press time, Bitcoin is trading for $3,800, while the global crypto market has lost almost $12 billion of its total market capitalization. The daily trading volume of Bitcoin has also declined sharply, falling from about $6 billion to $5.8 billion.

Canaan Creative has refused to set a deadline on when their generous offer ends, but the company remains optimistic about the world’s most popular cryptocurrency.

The Bitcoin Cash Hard Fork

Bitcoin Cash (BCH) is an offshoot of Bitcoin itself, breaking off from the latter back in August 2017 via a hard fork of its own. The BCH separation emerged as a result of an attempt to manage the scalability problem encountered by Bitcoin, as more investors wanted it to be used for transactional purposes and not just for speculative purposes.
The BCH community witnessed a little bit of a “hash war” in mid-November, with two factions being created, both of which had differing opinions on the next direction or the fourth-largest crypto by market cap. The factions- known as BCHSV and BCHABC- split on the 15th of November, forming blocks on the blockchain, all with an aim to assert their dominance and show that their rule set was more reliable.

This split, however, led to a sell-off as investors withdrew their holdings from both the BTC and the BCH markets, fearing a slowdown that could affect their holdings in the near-term.

   

eToro Risk Warning: 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.