Content overview:
1. At the time of writing, according to Coingecko data, the price of Bitcoin has reached US$18,317.34, which is approaching a high of US$19,000;
2. Some of the current mining machines with the strongest mining power from mainstream Bitcoin mining equipment manufacturers have been sold out, and it seems difficult to book again before May 2021;
3. Chinese institutions outside China have always been the main purchasing power of Bitcoin mining machines, but even so, overseas computing power has not yet achieved significant growth;
4. As the threshold for Bitcoin mining is getting higher and higher, many Chinese Bitcoin miners have begun to turn to Ethereum mining.
Bitcoin sword refers to $19,000, but mining machines seem to be insufficient
For some mainstream Bitcoin mining and mining equipment manufacturers, a new round of bull market is driving continued business growth. Now the demand for Bitcoin mining market has exceeded supply, and the batch bookings of these manufacturers have begun to queue up. It will be difficult to successfully obtain the latest Bitcoin mining machine before May 2021.
Judging from the current market demand for Bitcoin mining machines, institutional demand is accelerating.
According to the information displayed on the official website of Bitmain, the flagship mining machine products AntMiner S19 Pro, S19 and T19 produced by the company need to wait at least half a year to be delivered, which means that the pre-ordered bits that have been shipped before May 2021 The coin mining machine has been sold out.
Similarly, Bitmain’s biggest competitor, MicroBT, also disclosed on its official website that the flagship product WhatsMiner M30 series of mining machines have also been “sold out”. A spokesperson of the company said in an interview with The Block that future pre-orders for mining machines have been It has been received from April to May 2021, and the current production capacity that was only a few months before sales is basically in “out of stock”.
There are many reasons for the shortage of Bitcoin mining machine supply. In summary, there are roughly the following three main problems:
1. Starting from the third quarter of 2020, the price of Bitcoin has risen sharply;
2. As the price of Bitcoin rises, the demand for Bitcoin mining equipment from institutional clients has increased;
3. The wafer capacity of Bitmain and MicroBT chip suppliers is limited.
According to a MicroBT spokesperson, they are working hard to get more chips from Samsung to meet more orders in the future; on the other hand, Bitmain is also actively purchasing chips from Taiwan Semiconductor Manufacturing Co. (TSMC). Of course, the distributors of these bitcoin mining machine manufacturers can still provide a small amount of spot inventory to meet the demand for previous orders, although there is a large price premium. For miners, the first consideration when choosing a mining machine is computing power, because the higher the computing power, the faster the mining speed and the higher the profit. Basically, the computing power of the mining machine is determined by the performance of the chip. The chip is a precision component. The upgrade of its computing power needs to break through the technical barriers. It is a long process from research and development to production. These factors also make the supply of mining machines unable to catch up. Changes in market demand.
According to relevant quotations issued by some mining machine distributors on WeChat, the order price of Bitmain’s AntMiner S19 Pro spot inventory is between 3,800 and 4,100 US dollars. At the beginning of November 2020, the spot inventory price of the same model was around US$3,300 per unit. In addition, according to the order price of the AntMiner S19 Pro shipped in April this year, the price of the model was US$2,684.
Generally speaking, after the price of Bitcoin has soared, there will be a shortage of Bitcoin mining machines. This phenomenon has actually happened before. For example, similar situations occurred in the bull market cycle in June 2019 and 2017-but this year It seems to be different. You will find that the purchasing power of mining machines will be more consolidated in 2020, and the increased market demand will mainly come from overseas markets outside of China.
Foundry, a subsidiary of Digital Currency Group, mainly provides bitcoin mining equipment procurement services, and also provides financing services for mining machine operators in North America. The company’s CEO Mike Colyer revealed:
“We have many customers who want to purchase more than 1,000 Bitcoin mining equipment at once.”
Mike Colyer went on to explain that a large number of bitcoin mines have been built in the North American market in recent years, but the products of many wafer semiconductor manufacturers seem to have not kept up. They have not allocated enough chip supply to mining machine manufacturers as in the past. .
Kevin Dejun Ge is a senior Bitcoin miner who has been mining in China since 2017. He is now a partner of the Bitcoin mining fund company Miners.Fund. He shared some views on the recent Bitcoin mining machine market:
“In 2020, Chinese mining machine operators’ purchase demand for ASIC mining machines has been greatly reduced. Basically, starting from the third quarter, the production capacity of mining machine manufacturers has been sold to overseas buyers. MicroBT and Bitmain’s production capacity have basically been Large Bitcoin mining operators and funds have bought out. In the future, they will either use these mining machines to mine or they will choose to resell them when the price is high.”
According to Kevin Dejun Ge’s observation, the current single order of institutional mining machine buyers is usually around US$15 million, and a single purchase transaction starts with 5,000 mining machines. However, Kevin Dejun Ge analyzed that the increase in the purchasing power of Bitcoin mining machines in overseas markets does not necessarily lead to a decline in China’s computing power. He explained:
“The purchase order only reflects the contract between Party A and Party B, and the final flow of miners mainly depends on market conditions.”
The big reason why large institutional buyers want to place orders “crazy” is that they can enjoy substantial discounts in advance, and at the same time “betting” that the price of bitcoin will rise sharply when the mining machine is shipped, which means that even these buyers After the mining machine is obtained, it is not used for mining at all, and reselling it to local Chinese miners can also make a fortune from the price premium, which is also in the interests of overseas institutional buyers.
At the same time, for participants in the existing Bitcoin mining market, especially for Chinese retail mining operators, the threshold for entering (or expanding) the Bitcoin mining market is becoming higher and higher, even making People are daunting. In addition to the serious shortage of mining machines, the halving of Bitcoin mining rewards in May of this year also greatly reduced the profits of miners, and the difficulty of mining once reached the highest level in history-at the time of writing, according to BTC.com data The difficulty of mining on the whole network is as high as 18.96 T.
