ASIC Mining Prices Back at China Mining Ban Level
Hash price from application-specific integrated circuit (ASIC) mining has returned to the post-China mining ban level following the prolonged bearish state of the crypto market which is devastating the Bitcoin price.
According to Luxor Mining, which regularly provides industry-related analysis, data, and hash rate insights, the drop in the price of the top cryptocurrency has seen hash price drop below $0.13/TH/day and continues to push the timeframe for recording a return on investment for every mining deployment even longer.
It puts the mid-gen rigs (38-68 J/TH) at an average value of $43.61/TH, close to its July 2021 low of $43.20/TH, while mining equipment in the old-gen tier (over 68 J/TH) has fallen below their 2021 low of $21/TH as of mid-April, 2022. Only the new-gen ASIC tier (under 38 J/TH) is yet to go below a China ban low – and only the S19 and M30 mining rigs fall in this category in terms of average prices per machine.
Bitcoin's difficulty hit yet another record level yesterday, rising 4.89% to 31.25 T. This has driven hashprice to even deeper yearly lows.
— Hashrate Index (@hashrateindex) May 11, 2022
Bitcoin transaction volume and fees dropped last year following the Chinese government’s mining ban in May 2021. Hash and price action slowed down too but later normalized as mining rigs started rising slightly over the month of October. ASIC mining edged close to an ATH in October after the eighth Bitcoin mining difficulty since China’s ban surpassed its yearly high as the hash rate was almost at a pre-China mining ban.
Some factors like the semiconductor shortage, supply chain issues, and manufacturing hiccups aided the ASIC mining prices recovery. Others are an end to the panic selling that followed China’s mining ban which saw the resale market flooded with old and new rigs thus dropping their prices for miners to quickly scoop up discounted ASICs which helped apply a buying pressure. It was also rumoured at the time that Bitmain was moving its manufacturing capabilities out of mainland China.
The market lightened up in Q3 2021 as a whole and the Bitcoin mining industry recorded changes in the wake of China’s ban according to a Bitcoin Mining Council’s (BMC) report as part of the survey results from 29 companies which supposedly covered about 33% of the network. The changes include a 48% increase in Bitcoin’s hash rate over post-China ban lows.
Now, it is the “prolonged drawdown” that has brought ASIC prices to half of their ATH values, Luxor Mining states. The difference this time from the China ban when values dropped over a 2-month period is a bear market that has dragged on since December 2021.
So the market decline didn’t start now as prices for all tiers have been falling every week since the start of 2022. In the first week of May, Bitcoin mining profitability hit its lowest point since December 2021 following ASIC miners’ continued multi-month sell-off. It was the first time since December 16, 2021, for Bitcoin’s hash price to be below $0.15/TH/day as ASICs earn fewer Bitcoin each week.
The more Bitcoin’s difficulty increases, and as Bitcoin price continues to drop consistently, so would the hash price drop leaving mining margins in limbo for the rest of the year – or even beyond depending on the pace of the market’s recovery. Luxor Mining notes that unless Bitcoin’s price doubles back and runs for the heavens this year, ASIC prices will continue to bleed from here, particularly as nothing has been heard yet about capitulation.