Getting into Bitcoin mining costs less than it did in early 2022

graph buy the decrease in the price of bitcoin miners according to their level of efficiency

Key facts:
  • Although the drop in the price of ASICs in USD is pronounced, their price in BTC did not change that much.

  • The cryptocurrency market and its crash dragged down the prices of ASIC miners.

Thanks to the fall in the prices of ASICs, hardware used to mine BTC, investors and fans of bitcoin mining have a golden opportunity in 2022 to start practicing this activity.

The prices of the devices used to mine bitcoin have been falling precipitously so far this year. This is due, for the most part, to the bearish trend that the cryptocurrency market is showing. Bitcoin prices greatly influence the prices of the equipment that mines this currency.

For the month of April, CriptoNoticias reported that the prices of bitcoin ASIC miners had already fallen by 20% throughout 2022. This percentage has not stopped growing since then. According to mining data analytics firm, Hashrate Index, ASIC prices have fallen between 51% and 66% between January and July of this year.

graph buy the decrease in the price of bitcoin miners according to their level of efficiency
ASICs with an efficiency between 38 and 68 J/TH showed the most dramatic drop so far. Font: Hashrate Index

According to a Twitter user who presents himself as a Hashrate Index contributor and who was quoted by this web portal in one of his recent posts, the fall in prices of ASIC miners on the second-hand market has even influenced manufacturers’ prices.

In a tweet thread, @Balmy_investor explains that Bitmain, one of the most important manufacturers of ASIC miners worldwide, discounted 30% of the price to products such as the Antminer S19 XP. This includes sales booked from last year, in which the price agreed by the buyers was higher.

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Open doors to enter bitcoin mining in 2022

The accessibility currently displayed by the mining hardware to price level can facilitate the entry of many people to Bitcoin mining. Certainly, not everyone has $11,000 on hand to take advantage of the deal on an ASIC; but for those who were preparing to buy a mining device at twice this price, these prices may be attractive.

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Getting into Bitcoin mining costs less than it did in early 2022

It is of crucial importance to keep in mind that the ASIC is not everything in cryptocurrency mining. The facilities where it will work must be taken into account, since it is specialized hardware. Its electrical consumption is high, as well as the heat it generates when working at full speed. For these reasons, the electrical installations and the ventilation or cooling of the place where the ASIC will be located must be conditioned to prevent the equipment from overheating or malfunctioning.

In addition to independent miners, those who mine on a large scale may also be tempted to add more equipment to their farms. For example, if it is more modern equipment than they have under their belt, a farm can increase the profitability of mining or at least lessen the blow of its downfall given the current circumstances.

ASICs are cheaper, but there is another half to this truth

It is true that ASIC miners are much more accessible today, if their prices are evaluated in fiat currency. Nevertheless, if the price of these machines in BTC is taken into account, their difference is much smaller.

When evaluating the prices of ASIC miners in BTC, the only ones that went down are the mid-range ones, such as the Antminer S17 and the Whatsminer M20. Still, a 28% drop in BTC is not comparable to a drop of more than 60% in USD.

Curiously, the latest generation mining hardware and the oldest one that is still in force did not drop in pricebut went up.

Newer ASIC miners (such as the Antminer S19) are up 2% in cost, while those from older generations (such as the Antminer S9) are up 5% so far in 2022.

The reason behind these differences between the swing of BTC and USD prices of ASIC miners is not in the mining, but in the market. The pronounced fall that the cryptocurrency market has been experiencing caused both forms of payment to not go hand in hand at all.

graph will buy drop in the price of bitcoin with the decrease in the price of mining equipment and the decrease in the efficiency of asics
Correlation between the prices of ASICs according to their efficiency and the price of bitcoin so far in 2022. Source: Hashrate Index.

If bitcoin market swings are added to the USD price chart of mining ASICs, the correlation is evident, as the image above shows. This serves to draw attention to the loss of profitability in mining, which could be considered as the main trigger for the price drop of ASIC miners.

CriptoNoticias recently reviewed how much Bitcoin miners and cryptocurrencies such as ether (ETH) from Ethereum have been affected by the loss in profitability of this activity. Added to this is the rise in the cost of electricity in many countries, which is the main resource consumed by a miner in addition to the Internet connection.

The aspects mentioned above extend the ROI, as the return on investment made in the purchase of mining equipment is known. Therefore, any person or entity that decides to enter the world of bitcoin mining or extend the hashrate of their farm in the middle of this offer season, you should carefully assess the chances that your investment will be successful and not a loss to mourn in the end.

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