Bitcoin Heads to $19,000, But Miners Seem Not Enough

Moni

Odaily资深作者

2020-11-23 06:06

This article is about 2218 words, reading the full article takes about 4 minutes

Many customers want to purchase more than 1000 bitcoin mining machines at one time.

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Many customers want to purchase more than 1000 bitcoin mining machines at one time.

This article comes fromThe Blocksecondary title

Odaily Translator |

Content overview:

1. At the time of writing, according to Coingecko data, the price of Bitcoin has reached 18,317.34 US dollars, and is approaching the high of 19,000 US dollars step by step;

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. Institutions outside of China have always been the main purchasing power of Bitcoin mining machines, but even so, overseas computing power has not achieved a substantial increase;

4. As the threshold for Bitcoin mining becomes higher and higher, many Chinese Bitcoin miners have begun to switch to Ethereum mining.

For some mainstream bitcoin mining equipment manufacturers, a new round of bull market is driving business growth. Now that the bitcoin mining market demand has exceeded the supply, these manufacturers’ mining machines have begun to be ordered in bulk. It will be difficult to successfully get 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 Bitmain's official website, the company's flagship mining machine products AntMiner S19 Pro, S19 and T19 will have to wait at least half a year for delivery, which means that pre-ordered bitcoins that have been shipped before May 2021 Coin mining machines are sold out.

Similarly, MicroBT, Bitmain’s biggest competitor, also disclosed on its official website that its flagship WhatsMiner M30 series mining machines have also been “sold out.” A spokesperson for the company said in an interview with The Block that future pre-orders for mining machines have already been sold out. It has been received from April to May 2021, and the current production capacity, which is only a few months before sales, is basically in a "out of stock state".

There are many reasons for the shortage of Bitcoin mining machine supply. In summary, there are 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 customers increases;

3. Bitmain and MicroBT chip suppliers have limited wafer production capacity.

According to a spokesperson for MicroBT, they are working hard to obtain more chips from Samsung to meet the demand for more orders in the future; on the other hand, Bitmain is also actively purchasing chips from TSMC. Of course, the distributors of these bitcoin mining machine manufacturers can still provide a small amount of spot inventory to meet the needs of previous orders, although there is a large premium space. For miners, the primary consideration when choosing a mining machine is computing power, because the higher the computing power, the faster the mining speed and the higher the income. 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 cause the supply of mining machines to fail to catch up. Changes in market demand.

According to relevant quotations published by some mining machine distributors on WeChat, the order price of Bitmain’s AntMiner S19 Pro spot stock is between US$3,800 and US$4,100. At the beginning of November 2020, the spot stock price of the same model was quoted at around US$3,300 each. In addition, according to the order price of the AntMiner S19 Pro shipped in April this year, the price of the model at that time was US$2,684.

Generally speaking, after the price of Bitcoin soars, there will be a shortage of Bitcoin mining machine supply. This phenomenon has actually happened before, such as in June 2019 and in the bull market cycle of 2017. Similar situations have appeared-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 other than China.

Foundry, a subsidiary of Digital Currency Group, mainly provides procurement services for Bitcoin mining equipment, and also provides financing services for mining machine operators in North America. Mike Colyer, CEO of the company, revealed:

“We have many customers who want to purchase more than 1000 bitcoin mining equipment at one time.”

Mike Colyer continued to explain that a large number of bitcoin mining farms have been built in the North American market in recent years, but the products of many wafer semiconductor manufacturers do not seem to keep up, and 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 and 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' procurement demand for ASIC mining machines has been greatly reduced. Basically, since the third quarter, the production capacity of mining machine manufacturers has been sold to overseas buyers. The production capacity of MicroBT and Bitmain has been basically taken over Large Bitcoin mining operators and funds have bought out, and in the future they will either use these mining machines to mine, or they will choose to resell them when the price is at a high level.”

According to Kevin Dejun Ge's observation, the current single order of institutional mining machine buyers is usually around 15 million US dollars, 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 will 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 reason why large institutional buyers place orders "frantically" is that they can enjoy substantial discounts in advance, and at the same time "bet" that the price of Bitcoin will rise sharply when the mining machines are shipped, which means that even these buyers After you get the mining machine, you don’t need to use it for mining at all, and you can make a lot of money from the price premium by selling it back to local miners in China, which is also in the interest of overseas institutional buyers.

At the same time, the barriers to entry (or expansion) of the bitcoin mining market are becoming increasingly high for existing players in the bitcoin mining market, especially Chinese retail mining operators People are daunting. In addition to the serious shortage of mining machines, the halving of Bitcoin mining rewards in May 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 shows that Bitcoin The mining difficulty of the whole network is as high as 18.96 T.