Why is the crypto sector witnessing a Bitcoin mining equipment shortage
The crypto sector is booming. As a result, the surge in the entire industry is driving further demand for mining machines causing leading manufacturers to be unable to cope with the sudden surge in orders.
Now, firms such as Bitmain and MicroBT are already sold out due to the overwhelming demand. In fact, Bitcoin mining machines are unavailable until August 2021, a Bitmain spokesperson told a local media publication, Jiemian News.
The increasing popularity in the digital asset and the overall supply shortage follows Bitcoin’s price jump since December 2020. Crypto enthusiasts saw the price touching an all-time high of almost $42,000 with the lowest falling to circa $29,000. However, despite the volatility, this sparked an increase in institutionalized demand for mining equipment.
It’s easy to see why the Bitcoin mining business, a sector dominated by China, sent prices of the computer equipment soaring. Miners across the network have been seeing an escalating income since last few months. According to research by Glassnode, the hourly income of Bitcoin miners was at around $1m in December. For context, miners achieved an increase of 185% since the Bitcoin halving in May 2020.
Global supply shortage worsens
While mining high-value Bitcoins is quite profitable, owning mining machines has added benefits. Miners anticipate a hefty “profit space [on] doubling the value of the mining machines.”
“Affected by the shortened return cycle and current interests, many retail investors and professional institutions 2have entered the mining industry under this round of market conditions,” it detailed.
Bitmain said it even doubled its prices for relevant mining equipment and the sector still witnessed machines to be thin on the ground. For instance, the Antminer S19 95T priced at 20,340 yuan was then selling for about 45,000 yuan on the official website.
According to local news, Wonder Mines CEO Mint highlighted that in March 2020, the Ant S19 cost was around 13,000 yuan with the spot price at around 15,800 yuan. But now, it can potentially sell for 53,000 yuan up almost 5 times after the surge in Bitcoin prices since January 2021.
Even a second-hand retailer has less than a hundred units available. Furthermore, “in the second-hand market, the old mining machine models are “resurrected” back to the market, and the shortage of graphics cards is further aggravated,” the report said. This is hardly the first time the industry is experiencing a dearth of mining machines. In 2017 as well as 2019, the bull market saw a massive lack of supply.
Looking ahead, Mint said that “if Bitcoin continues to rise, it will be difficult for S9 to exit the stage of history.”