The Status of the Bitcoin Mining Industry
In recent years, Bitcoin mining developed from the participation
of a few geeks and programmers to a hot investment target with a current market
cap of $175 billion.
Through fluctuations in both the bull market and bear market
activities, many traditional entrepreneurs and fund management companies
continue to play a key role in the mining industry today. Fund management
companies no longer use traditional models to measure mining. In addition to
introducing more economic models to measure returns, they have also introduced
financial instruments such as futures and quantitative hedging to reduce risks
and increase returns.
Bitmain has observed a dramatic shift in the interest of Bitcoin mining
since the previous halving in 2016. A significant number of service companies
have emerged in the mining industry, including third-party mining suppliers,
mining operators, maintenance service providers, mining hardware finance
leasing companies, third-party mining hardware maintenance companies, and
digital currency financial services.
Industry integration saw companies like Bitmain expand their
business to integrate other services. Exchanges began to establish mining
pools, and mining pools began to develop wallets. All of these are a result of
the bear market as companies could not only offer more but now had the demand
to take more on.
The Price of Mining Hardware
For many miners who have entered or who are considering entering
the mining market, the pricing of mining hardware is of key interest.
It is commonly known that the price of mining hardware can be
divided into two categories: factory price and circulating price. Many factors
dictate these pricing structures with the fluctuating value of Bitcoin, a key
factor in both the new and second-hand hardware markets.
The actual circulation value of mining hardware is affected not
only by the quality, age, condition, and warranty period of the machine but by
fluctuations in the digital currency market. When the price of a digital
currency rises sharply in a bull market, it can cause a short supply of miners
and generate a premium for hardware.
This premium is often proportionally higher than the increase in
the value of the digital currency itself, leading many miners to directly
invest in mining instead of cryptocurrencies.
Likewise, when the value of a digital currency is in decline and the price of mining hardware in circulation begins to fall, the value of this decrease is often less than that of the digital currency.
Acquiring an Antminer
At the moment, there are excellent opportunities for investors
to enter the market and own Antminer hardware based upon several key factors.
In the lead up to the recent Bitcoin halving, many established
miners and institutional investors held a ‘wait-and-see’ attitude on the
effects on currency prices as well as the total computing power of the network.
Since the halving occurred on May 11, 2020, the total monthly network computing
power fell from 110E to 90E, however, the value of Bitcoin has enjoyed a slow
rise in value, remaining relatively stable and free from the anticipated sharp
Since this halving, those who have purchased new mining hardware
can expect an appreciation of both the machine and Bitcoin over the next years
until the next halving. As we move into this new cycle, revenue generated by
Bitcoin will stabilize and profits will likely remain constant throughout this
Global Mining Trends
At present, China’s mining scale accounts for 65% of the world’s total, while the remaining 35% is distributed from North America, Europe, and the rest of the world.
On the whole, North America has gradually begun to support digital asset mining and guide funds and institutions with professional operation and risk control capabilities to enter the market; Stable political situation, low electricity charges, reasonable legal framework, relatively mature financial market, and climate conditions are the main factors for the development of cryptocurrency mining.
USA: Missoula County Committee of Montana has added
green regulations for digital asset mining. The regulations require that miners
can only be arranged in light and heavy industrial areas. After review and
approval, the mining rights of the miners can be extended to April 3, 2021.
Canada: Continues to take measures to support the development of digital asset mining business in Canada. Quebec Hydro has agreed to reserve one-fifth of its electricity (about 300 megawatts) for miners.
The advent of the annual flood season in the
Sichuan province in China ushered in a period of significantly lower
electricity costs for mining hardware, which can accelerate more mining taking
place. As the flood season reduces costs and increases profits, it is expected
to see a reduction of Bitcoin liquidation, which would also stimulate the rise
in currency prices.
Advice for Choosing a Suitable Mining Machine
For individual miners, Bitmain recommends a machine with a
relatively low power consumption ratio represented by T17+ and S17e. This miner is currently the mainstream model in the market.
Compared with the latest models, the price is lower, the return period is
shorter. When cryptocurrency price rises, the volatility of mining hardware to
electricity prices will decrease, and this advantage will gradually widen,
bringing more benefits to investors.
For customers who value mid to long-term returns, it is especially important to choose a machine with extremely low power consumption and stable operation. The Antminer T19, S19, and S19 Pro are selections tailored for this type of investment. A notable highlight is the current chip technology equipped in the 19 series is the most advanced technology at present. With the total production capacity of mining hardware manufacturers today being limited and the existence of Moore’s Law leads to an increasing physical iteration cycle of the chip, which in theory will lead to an increased lifecycle available to new hardware.
Liked this article? Share it with others:
Follow Us for Latest News & Articles: