Like all asset classes, Bitcoin has taken a major hit this last month. With that 45% drop, it has really affected confidence in the industry, and nowhere more so than the Bitcoin mining sector.
Since the drop on March 11th, even though it’s regained much of the losses, mining profitability and confidence has taken a real hit and many miners have switched off their machines for now.
Is Bitcoin Mining in Trouble?
Many mining firms are having to play things a little different. If nobody wants to buy mining equipment, manufacturers and merchants have to fall in line. And we’re seeing this with mining equipment being sold at discount rates.
Californian Mining firm, Digital Farms announced it would be closing its doors indefinitely until the present economic conditions blow over. Riot Blockchain has also said it’s suffering from the coronavirus shutdown, and is looking to revamp and refigure its operations to stay in business.
It’s not a surprise, because nearly all industries are suffering, and because mining isn’t regarded as an essential industry (some might argue) it isn’t immune to the problems the world economy is going through right now.
Related Reading: Which Mining Pool Should You Join
Is it Time To Buy Mining Gear at Discount?
All the major manufacturers are selling mining hardware at a discount now. The WhatsMiner M30s is on sale. Originally $2,537 each, you can now buy them for about 20% less at roughly $2,000.
The second-hand market on eBay and Amazon is on sale too. If you’re looking for cheaper used mining gear, there’s a major sale going on.
But the truth is this always happens when there’s miner capitulation. Many miners have to pay their bills with the block reward, so they cannot operate at a loss for too long. Compounded with the fact the halving is set to cut the reward in half, this sale is likely to go on a bit longer.
But there’s also the new Antminer S19 that’s being distributed now. With 110 TH/s it dwarfs anything on the market and anyone serious about getting into mining should really consider getting gone of these.
At 110 TH/s the S19 consumes about 3200 watts, which is about 2.5X higher than the Antminer S9. But if you factor in 9X more hashrate, it makes so much economic sense. With these now on sale, albeit pretty much impossible for the solo miner to get, its escalating the mining equipment sale.
You can get used Antminer S9s for less than $150 on eBay. Cheap, for sure, but ask yourself why they’re so cheap. Because everyone is upgrading as fast as they can.
No doubt the Bitcoin price affects mining profitability, and most miners cannot operate at a loss for too long. These market conditions always infuse miner capitulation, which in turn brings about a sale, especially the second-hand market.
Added with the fact that the Bitcoin halving is just over a month away, and Bitmain has just released the most powerful Bitcoin miner to date, it’s obvious why there’s such a big sale on other mining equipment.
If you’re new to mining, I wouldn’t recommend the cheaper and older rigs. They’re cheap for a reason. If you want to compete, invest as much as you can and get the most powerful rig you can afford and your mining profitability will mirror your investment.
Author: Tommy Limpitlaw