Last year, miners were clamoring to sign advance contracts with Bitmain and its peers, MicroBT and Canaan, as a bull market sent the bitcoin price to a record high, driving up production. Demand has since slowed and the price of rigs has dropped from an average of $68/TH on Jan. 1 to $20.8/TH on Sept. 20, Luxor Technologies data show.
"The market is choking on the volume of new hardware, some that was preordered and financed with the hope of expansion," said Denis Rusinovich, co-founder of CMG Cryptocurrency Mining Group and Maverick Group. An indicator of how much North America was flooded with hardware was illustrated about a month ago, when hardware imported into the U.S. was cheaper by as much as $1.5/TH compared with China.
Based on conversations with analysts, Matt Schultz, the executive chairman of bitcoin miner CleanSpark, estimates that there are 250,000-500,000 new mining rigs sitting in their boxes across the U.S. "Bitmain's new discount price of $19/TH will definitely lead the rig market to drop further," said Arcane Research analyst Jaran Mellerud.
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