As the Bitcoin (BTC) mining business increasingly struggles, the price of ASIC mining hardware has fallen 80% since its peak in 2021. What does this mean for the future? of the crypto industry and market? We explain to you.
Mini mining machines
Here’s another sign that the Bitcoin (BTC) mining industry is in disarray. ASIC miners, these machines for mining bitcoins, are selling at ridiculous prices compared to their 2021 high. Down 80%, they are back to levels not seen since 2020.
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Bitcoin ASIC Mining Machine Price Trends
As evidenced by this data from the Hashrate Index website, ASIC package prices are plummeting. If we are interested in machines producing at least 1 terahash for 38 Joules of energy – namely the most efficient on the market – their price has dropped from $119 in May 2021 to $15 at the time of writing these lines.
This trend is also found in less efficient machines, whose price fell by 90% over the same period. Such levels have not been seen since 2020. But what explains such a fall in prices and how to analyze it?
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The struggling mining industry
Concretely, this price drop is part of a complicated global context for the Bitcoin mining industry. Players struggle to stay profitable as bear market drags on. Many companies are initiating bankruptcy proceedings under Chapter 11 of United States law, such as the giant Core Scientific.
Concretely, the profitability of a bitcoin miner is calculated according to 4 criteria : its computing power, the difficulty of mining Bitcoin, the price of Bitcoin and finally the cost of energy. For the first time since the creation of Bitcoin, three of these four criteria are extremely unfavourable.
The energy crisis we are going through propelled electricity prices to new heights. Although some of the miners have optimized their activity to exploit cheaper energy (by basing themselves in developing countries or by connecting to production plants), this variable weighs very heavily in the balance.
So is the fall in ASIC miner prices reason enough to start mining bitcoins at home? For all the reasons given above, the answer is definitely no. The cost of electricity is skyrocketing, as is the difficulty of mining, while the price of bitcoin is at its lowest: all the ingredients for a bad sauce.
👉 Also in the news – Bitcoin (BTC) mining giant Core Scientific files for Chapter 11 bankruptcy
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