With Bitcoin currently down over 82 percent, the prices of crypto mining devices are falling hard and crypto miners are shutting down as business is falling.
Mining Computers’ Price Plunge, Businesses Shut Down
Crypto winter has been now going for over a year now. Bitcoin is currently down more than 82 percent from its all-time high (ATH) at $19,000 in December 2017. At the time of writing Bitcoin has been trading around $3,550.
This ongoing winter might be productive for crypto firms that are engaged in building the foundation and infrastructure, however, it is hitting the miners hard. According to the latest report by Nikkei Asia, Chinese miners are facing setbacks since the prices burst.
In the Shenzhen’s Huaqiangbei district, a place is known for electronic shopping and second-hand mining computers, many vacant booths can be found. The prices of these machines that vary by the model have come under 400 yuan ($59), seeing a significant fall from 30,000 yuan, they once fetched.
Lu Qing, a young crypto enthusiast who ran a mining business recently returned home after his business failed. With 7,000 mining computers in mid-2018, the business was still making a profit when the downturn first surfaced due to the low cost of electricity in Qinghai. However, the business collapsed with Bitcoin crash and Lu has to sell off the mining computers.
The leader in cryptocurrency mining, Bitmain is also affected by this market upheaval. The company sought to debut on the Hong Kong stock market last year but couldn’t gain approval.
Bitmain’s performance has been considerably disappointing and the reports of the company’s co-founder and CEO Jihan Wu stepping down has been making the rounds in the market.
Taiwan Semiconductor Manufacturing Company Limited, that provides chips to Bitmain, recently said that last year saw a downturn in the demand for crypto mining chips.
“This year, we don’t forecast — we become conservative in forecasting this volatile business. So the cryptocurrency mining this year is much, much less than last year.”
The publication, however, mentioned that amidst the struggle Beijing is having in the trade war with the US, the Chinese government is “looking to funnel money into the company.” According to a Shanghai venture capital firm, the govt. is counting on the firm’s ability to develop semiconductors.
As we recently reported, Diar Research states that while major miners are suffering, new ones are joining the race. Also, the difficulty of the network is yet again have started moving upwards in around mid-January after going through a drop from October to December last year, which means new miners are entering the market.