|
The scene of mining machines being sold by kilogram at the end of 2018 seems to be still before our eyes, and the 312 coin price waterfall has once again put small and medium-sized miners in an unfavorable situation. From March 12 to 13, the price of Bitcoin fell like a waterfall, shrinking from the original $8,000 to a minimum of $3,600. The price of the currency was halved, and the trading market was cleaned up. More than 20 billion yuan of contract assets were liquidated, and a large number of loans were forcibly liquidated. The collapse of the Bitcoin price on the “front desk” affects the mining behavior of the “back desk” miners. More than 10 days have passed since the 312 waterfall, and the Bitcoin price is still recovering slowly. This is probably the last thing miners want to see. The mining activities of miners have obviously been affected. Mining shutdowns, price cuts, and longer payback periods According to BTC.com data, the average hashrate of the entire network has dropped from about 120EH/s in early March to about 95EH/s in the past seven days, and the mining difficulty is expected to drop by 13.33% in one day. The logic behind the decline in the hashrate of the entire network is that some mining machines have shut down. F2Pool co-founder Shenyu recently said in a live broadcast of the summit that "if the price of the currency does not rise significantly, 70% of the mining machines in the entire network will shut down, which will be a disaster for miners." On March 12, the day of the crash, F2Pool data showed that based on an electricity price of 0.38 yuan per kilowatt-hour, a number of mainstream mining machines including Whatsminer M3, Avalon A741, Ebit E9+, Ant T9+, Avalon A821/A9, and Innosilicon T2 reached shutdown prices. Industry insiders pointed out that most of the mining machines that have been shut down are low-computing power models such as Ant S9. Assuming that the average computing power of these mining machines is 15TH/s, it is equivalent to approximately 1.93 million mining machines being shut down. Jiang Zhuoer, founder of LiteBit Mining Pool, said in an interview with Nuclear Finance that "LiteBit's own mining farms have shut down all Ant S9 mining machines." Old models are facing the situation of being eliminated by the market, while the high-performance mining machines on the market have seen their payback period lengthened and are being sold at a reduced price. Data shows that for high-performance mining machines on sale with a power consumption ratio in the range of 40-50W/T, their electricity expenses account for about 50% of daily mining income. The original payback period of 200-300 days has now been extended to more than 400-800 days. There are less than two months left until the halving. Without considering the advantage of low-cost electricity, "semi-new" mining machines whose electricity costs account for more than 50% will theoretically be on the verge of shutdown after the halving.
Once the price of coins drops, mining revenue is squeezed, and mining machines become worthless. Wu Tong, deputy director of the CECBC Blockchain Committee of the Ministry of Commerce and dean of the Digital Economy Business School, recently said in an interview with a reporter from Securities Daily that "a wave of selling mining machines has already appeared, and the average selling price of each mining machine has dropped by 30-50% compared to before the Spring Festival." Big miners are preparing for halving. Small miners are wary of new machines Mining is essentially a process of continuously eliminating backward production capacity. Against the backdrop of a sluggish global economy, the possibility of further advancement of Bitcoin, the speculative expectations brought about by the third halving, and the hydropower prices that come with the halving may bring about an unprecedented opportunity for industry development. Even though the current performance of the Bitcoin market is disappointing, the expectations of some miners remain unextinguished. However, a sharp rise is often based on a sharp decline. The reason behind the deep clean-up of the mining industry is that small and medium-sized miners cannot bear the pressure and leave the market. Large miners (mining pools and mines) are gradually preparing low-power machines, and will enter the market in large numbers after the halving situation stabilizes, but small and medium-sized miners do not have such financial resources and resources to reserve chips. Jiang Zhuoer ordered the Antminer S19 mining machine. Information source: Wu says blockchain At 2:00 pm on March 23, Bitmain’s official website launched two mining machines, Antminer S19 and Antminer S19Pro. Because the power consumption ratio has entered the 30J/TH era, the Antminer S19 series mining machines are known as the most powerful models on the market. According to Wu Blockchain, the two mining machines were sold out within 2 minutes of release. According to estimates by people familiar with the matter, the first batch of S19 series mining machines is expected to produce around 10,000 units. A small number of units have been released on the official website, and most of the machines have been locked by large customers. In fact, too low mining income has reduced the willingness of some miners to buy the latest generation of mining machines represented by the S19 series. According to the data from the Mining APP, at the current price of coins, the payback period for these two mining machines is about 400 days. On the one hand, the production of new machines is limited, and miners cannot buy new mining machines whenever they want; On the other hand, the mining industry depends on the weather. After this epidemic, miners have deeply felt the price fluctuations of Bitcoin. The subsequent price trend is unpredictable, and small and medium-sized miners dare not rush to buy new machines because they do not have enough funds to bear the risk of price drops again. This is the case for downstream miners, and the situation for upstream mining machine manufacturers is not optimistic either. At the end of last year, Bitmain launched three tricks at a customer appreciation meeting: put options, joint mining, and a down payment + final payment model. Bitmain placed its bets on this year's halving, its own financial sustainability, the market demand for a new generation of mining machines, and the competitiveness of Antminers. In addition, major mining machine manufacturers have been actively developing new machines since last year in order to overtake others and seize the market during this halving. However, at present, it is unlikely that the mining machine manufacturers will be able to meet their expectations for the halving in time, and it may be a cold winter before the market recovers. Under the liquidity crisis, miners can no longer hold on to their coins The miners have always been known as the biggest short sellers in the industry. All actions taken by miners are based on the principle of getting their mining machines back. Mining is a business that requires heavy investment. The investment not only refers to the cost of configuring the mining machine, but also includes high electricity expenses and maintenance costs of the mining machine. Therefore, mining has high liquidity requirements for miners. According to the information provided by Baima to Bibi News, small and medium-sized miners have to spend 500 yuan or more every month on a high-computing power machine. In addition to electricity expenses, mining farms also have to bear costs such as factory rent. Black swan events such as March 12 caused the fiat currency assets in the hands of miners who hoard coins to shrink. The loan liquidation triggered by the decline in coin prices caused some miners to be forced to sell their hard-earned coins at a low point. "I used to hoard coins, but my positions were liquidated using lending services. Now I will sell coins because I think survival is more important than anything else." Bai Ma told Bibi News. After this liquidation, Bai Ma realized the rationality of "mining and selling coins". Mining and selling coins is an early transfer of risks by miners. Hoarding coins without selling them will not generate compound interest, and miners will lose some opportunities to update their machines. Mining is a competition of computing power, and if the machines are not updated in time, miners will continue to be at a disadvantage. This is the consensus of the mining industry, and it is also the reason why many miners choose to "sell" Bitcoin. Mining consumes the financial resources of miners. The global economic downturn has caused the assets held by miners (not only crypto assets, but also stocks, bonds and other assets) to shrink, liquidity has become tighter, and loan liquidation has made miners cautious when considering whether to use loan services. In this case, it may be more difficult for miners to get coins. Baima's mining strategy has changed from hoarding coins to trading. "People who hoard coins are actually quite greedy, and the most important thing about making money is to be willing to give. I have thought a lot during this period, and the strategy of hoarding coins must be problematic. Mining is actually good for miners to do transactions. Mining brings continuous chips to miners, and miners can keep buying and selling coins to make profits," said Bai Ma. Miners are determined to sell Bitcoin, and at the same time, the 312 market crash has also caused great harm to coin holders and coin speculators. Market confidence has been halved, and this time, coin holders and coin speculators may no longer be able to provide strong support for miners. Miners' capitulation and the Matthew effect in the mining industry Many small and medium-sized miners and mines are facing a reshuffle and exit. "The current market situation will definitely have a big impact on those who have previously added leverage. Installment payments, mortgage loans, and other off-site leverage will cause many people to leave the industry. It depends on who can hold on." In 2019, some crypto analysts proposed the concept of "miner capitulation", and now "miner capitulation" seems to be happening. "Miner capitulation" refers to the situation where smaller, non-professional mining operations are forced into a corner when Bitcoin prices fall and mining equipment is outdated. "When miners run out of liquidity, they panic sell, causing Bitcoin prices to fall. At this time, longs will be squeezed, triggering more people to sell to stop losses." The result of "miner capitulation" is a sharp drop in the price of the currency. This situation ends with the elimination of small and medium-sized miners, the remaining most profitable miners redistributing the computing power of the entire network, and mining becomes profitable again. The mining crisis began with the sudden drop in Bitcoin prices on March 12 and 13, which brought about leverage liquidations and loan liquidations, as well as further price stampedes on this basis. Affected by the price of the currency, some low-performance mining machines were shut down, and the computing power of the entire network dropped from about 120EH/s in early March to about 95EH/s. At present, the price of the currency has recovered slowly, and has continued to fluctuate between 6,000 and 6,800 US dollars. The financial tolerance and patience of miners are being continuously worn down. In addition, the impact of the epidemic and the stock market circuit breaker, the mining industry can be described as difficult in the short term. In order to survive, miners continue to sell Bitcoin, which still poses a risk of price decline. Under the liquidity crisis, some mine owners have been forced to shut down, close or even sell their mines. The living space of small and medium-sized miners and mining farms is constantly being squeezed. The Matthew effect seems to apply to the mining industry as well. The fittest survive and the strong become stronger. After the trough, the mining industry will absorb new miners. This cycle will continue endlessly, driving the development of the mining industry and also driving the price of Bitcoin. "Small miners suffer before halving" by Nuclear Finance "Bitcoin's sharp drop caused a chain reaction, and more than 40 mainstream mining machines reached the "shutdown price"" by Securities Daily Voice "There are still six months before the BTC halving, but the miners have "surrendered"? " by Planet Daily |
