Bitmain lowers prices of Antminer S19 series to mine Bitcoin

Average price of Antminer S9 XP ASIC

Key facts:
  • Marathon would be the company that would obtain the greatest benefits, for the purchase of 73,000 S19 XP.

  • Bitmain’s price adjustment also affects the second-hand market for these devices.

Bitcoin miners learned to take exceptional measures in extreme situations. This is confirmed by Bitmain, the main manufacturer of mining equipment, which lowered the prices of the S19 series Antminers for its main clients.

According to a Hashrate Index publication released today, Bitmain is resetting the prices of S19-series Antminer rigs for mining Bitcoin. The main reason for this decision is related to the crisis experienced by the sector as a result of the bear market.

As part of the pre-sale agreement for equipment manufactured by Bitmain, Bitcoin miners who placed orders for the Antminer S19 XP, S19 J and other models in the series can apply for a price protection credit. This would allow miners to take a cut on the pre-purchase they made between November and December 2021, with an adjustment calculated approximately 15 days before final payment.

This means that miners will be able to pay the remaining balance of the purchase based on the adjusted price of the equipment between July and August of this year.

In addition, they can make use of other clauses, which include the possibility of adding other machines to the order to compensate for the difference in cost (depending on the available inventory on Bitmain) or cancel the order partially or in its entirety. In the latter case, the buyer would not have the possibility to request a refund, but would obtain a credit for the remaining balance in Bitmain products.

Effects of the price cut on the secondary market of Bitcoin miners

Bitmain’s price cut would have repercussions on the second-hand market for Bitcoin mining equipment, as a statistics of Hashrate Index.

As can be seen, the downward trend in the price of Bitcoin mining equipment continues, as we have reported in CriptoNoticias. The average price of the S19 XP model in July is just USD 7,962.

Average price of Antminer S9 XP ASIC
The prices of the S19 XP fell around 30% in the month of July, compared to the previous month. Source: Hashrate Index.

How much are Bitcoin miners saving with this price cut?

According to the regulatory document of the American Securities and Exchange Commission (SEC) that contemplates the Bitmain sell orders, the main beneficiary of this price adjustment is Marathon Digital. This company has scheduled orders for 73,000 S19 XP miners, to be delivered between July and December 2022.

Marathon placed orders for a price of USD 83/TH ($11,620) in July last year. Upon delivery (Q4 2022), the value of those equipment will drop to USD an average of USD 50/TH. This way of expressing the value of the sale allows to simplify the figures, based on the processing capacity of the Antminer S19 series miners.

Between July and August, Marathon will receive 13,000 teams each month. If the company chooses the price adjustment option, they would be saving USD 110 million in the purchase of S19 XP miners.

Riot Purchase Order to Bitmain
Bitmain’s public purchase order document details the price adjustment value of the S19 XP Bitcoin mining equipment purchased by Marathon. Source: SEC Regulatory Document / Hashrate Index.

The remainder of Marathon’s order is expected to be priced similarly to these. Each month the adjustment will be calculated based on the current market price.

For its part, Riot Blockchain pre-purchased 18,000 S19 J Pro machines. According to the original contract, these machines were priced at USD 65/TH. In fact, the company has already taken deliveries of 1,500 machines each month at this price.

If Riot requests Bitmain’s price adjustment, the order for July and August this year will be worth USD 37/TH. This would translate to a savings of 4.5 million on your August order..

Price adjustment option for Riot on Bitmain
Riot could save up to $8.6 million by using Bitmain’s price adjustment option. Source: SEC Regulatory Document / Hashrate Index.

According to the document outlining Bitmain’s US sales orders, Riot also placed orders for the Antminer S19 XP model. Between July and August of this year, 6,000 of these miners would be delivered. In this operation the company could save USD 25.45 million.

Riot purchase order to Bitmain, supervised by the SEC
The SEC regulatory document details the purchase order and delivery schedule for the S19 Pros that Riot purchased from Bitmain. Source: SEC regulatory document.

Another company that could benefit from this Bitmain price adjustment is Bitfarms. According to a press release, the company made a purchase anticipated 1,200 Bitcoin miners in December of last year.

With the estimated prices in the document, Bitfarms could save $1.68 million in the span of two months. In its publication, Hashrate Index suggests that, for an order of this magnitude, it would make sense for this company to acquire more units instead of requesting the price adjustment.

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