Bitcoin miners see in the bear market an opportunity to acquire cheap equipment

chart shows decline in price index of ASIC miners

Key facts:
  • Miners agree that the drop in prices may be opportune to acquire new equipment.

  • Average prices of latest generation ASIC miners fell to $6,000, according to Hashrate Index.

With the drop in bitcoin (BTC) prices, an interesting opportunity opened up to enter the mining business, the activity that keeps the network on the air. This, because specialized equipment (even the newest) have more accessible costs for those who consider investing money in the industry.

I agree with you graphics from Hashrate Index, the Bitcoin mining analysis firm of the Luxor mining poolthe average prices of an ASIC continue to decline, accumulating 25 weeks in sustained decline, practically all that has elapsed in 2022.

The average prices of the latest generation ASIC miners, such as the Antminer S19 Pro (110 TH/s) from Bitmain or the Whatsminer M30s from MicroBT, fell to USD 6,000, the minimum peak reached so far this year.

If we look at the situation with older equipment, we will notice the same trend. Mid-range miners such as Bitmain’s Antminer S17 (56 TH/s) and T17 series rigs (40 TH/s) are at lows of $1,650, with a slightly less pronounced drop compared to previous weeks.

And the older ones, like the Antminer S9 (13 TH/s) or Whatsminer M10 (33 TH/s), are at lows of $181.87, maintaining the downward trend that they have been dragging since the beginning of 2022.

chart shows decline in price index of ASIC miners
The prices of ASIC miners to mine Bitcoin accumulate 25 weeks of sustained decline. Font: Hashrate Index.

At a time when ASIC prices are down, mining profitability is on a tenuous recoveryWell, this weekend it hit lows not seen since October 2020, of just 7 cents for every terahash invested in the network.

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Bitcoin miners see in the bear market an opportunity to acquire cheap equipment

And all this happens when bitcoin also begins to recover from a rally bass guitarist that led him to forge a new story, because he broke the expected behavior and fell from USD 20,000, to annual lows of USD 17,700, they were overtaken shortly after by a rebound. At the time of publishing this news, 1 BTC is trading on the $21,000according to CoinMarketCap.

An opportunity to be seized

The accumulation of low ASIC prices, with the slight and medium recovery in profitability and the price that has been reached after reaching the worst figure recorded, they combine the perfect formula so that mining Bitcoin is an option that cannot be missed right now. It could be seen as a greater opportunity to take steps within the Bitcoin ecosystem through mining, as new equipment is fresh bait for the eager investor.

This is shared by 5 Bitcoin miners who were consulted by CriptoNoticias this Monday. Briefly, we talked with them about what a drop in prices of this magnitude means for this specialized equipment, whose true benefit goes hand in hand with the energy cost that has to be paid for mining.

Marc Bosch, from the company PoW Containers, asserted that the drop in prices caused problems for those who bought machines at a higher price and had to wait up to 4 months for them to arrive. “Right now, at the price these machines paid, it is causing great losses to many miners who had long-standing purchase orders,” he explained.

Even so, he agrees that in the market “there are opportunities to buy machines at prices that can be recovered more quickly as they are lower than a few months ago.”

Bosch notes that as long as you have access to relatively cheap electricity “it’s worth getting into the business of mining”.

“It is true that the profitability of miners with the latest price drops and the rise in mining difficulty are not favorable conditions for miners, but in the long term the trend continues to be upward, and the current situation is going to throw from the market to less profitable miners to make room for those who are more profitable, and have more sustainable business models”.

Marc Bosch, PoW Containers.

Bosch agreed with Fabrizio Bianchi, who is the chief technology officer of the Uruguayan Bitcoin mining company, UyBit. He maintained that the drop in ASIC prices “is a very interesting opportunity”, since when bitcoin rises in price “the teams are not going to be in the same range.”

Amazon purchase offer for a Bimain Antminers S19 Pro
A Bitmain S19 Pro ASIC is trading above $7,680 on Amazon.com on Monday. Font: Amazon.com.

“If profitability is tied to the price of bitcoin, we know that the winter will pass. And when that happens, we will be in greener numbers than at the moment », he argued in conversation with this newspaper.

A matter of conviction

Daniel Frumkin, director of content at Braiins, explained to this newspaper that Bitcoin mining is a “long leverage” at the price of BTC and is rather a matter of conviction about the cryptocurrency and its long-term performance.

“If the BTC price is doing well, your performance as a miner is very good because your hardware appreciates in value and generates cash flow at the same time,” he suggested. “In that sense, it is a great opportunity to get into the mining business if you have high conviction in BTC, that it will come out of this dip and hit new all-time highs again in the next two years,” he added.

“Regardless of market conditions, the main reason to start mining is the long-term conviction that BTC will do well. If you do not have this conviction, it makes no sense to invest in mining”-

Daniel Frumkin, Chief Content Officer of Braiins.

graph shows the decline in the bitcoin hashprice to 7 cents and its recovery to levels of 9 cents
Bitcoin hashprice fell to 7 cents, but then rebounded and is now hovering around 9 cents. Font: Hashrate Index.

But he warns that it only makes sense to enter the large-scale mining business if you have access to cheap electricitywhich is generally below 6 cents per kilowatt hour consumed.

Paulino Rossi, CEO of SouthMining Capital, an Argentina-based Bitcoin mining company, agreed with Frumkin. He explained to CriptoNoticias that, by lowering the price of the equipment, “The rate of return will depend on the variable costs of energy for the generation of this currency”. “The determining factor for entering the mining market will have to do with energy costs,” he argued.

Rossi defends that the current moment of the ASIC market is an “excellent opportunity to make investments and enter” in the industry. This, because if there are reasonable and positive rates of return at a time of low price, “any increase in profitability, as a result of an increase in bitcoin, will generate the opportunity to enter a restrictive business due to costs and access to resources. equipment”.

Always a safe option

Fernando Grijalba, who is Braiins’ business developer for Latin America, was also consulted by CriptoNoticias in this regard. For this miner, “it is always nice to buy ASIC miners at a good price”but “depending on the vision you have”.

“If it’s long term or short term, maybe it’s more worthwhile to use that capex to buy Bitcoin outright and also use the opex to keep buying. If you think in the long term, machines are always a safe option”.

Fernando Grijalba, Braiins business developer.

Grijalba argues that miners who use their production only to pay for energy consumption are not in a good time to continue operating. However, he does not call to sell. He calls holdear.

“It is time not to sell and endure, a game of cash flow, the one who has cash and endures, wins in the long run,” he closed.

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