Suffering a Deficit, Crypto Miners Try to Survive as Winter Coming
On November 25, F2pool said in social media that ” six kinds of bitcoin mining machines including Antminer S9 are suffering a deficit if accounted at electricity charge of 0.38 Chinese yuan /kWh according to the current mining difficulty.”
Bitcoin price plunged below $6700 on that day, while the shutdown price of ant S9 miner is about $6786. If bitcoin price is lower than the shutdown price, the profits from bitcoin selling cannot cover the cost of machine, maintenance electricity.
Although bitcoin prices have gone up in the past two days, the four kinds of mining machines including Whatsminer M3, Avalon A741, Ebitminer 9+, and Antminer T9+ were still at the shutdown price, while Avalon A821 and Antminer S9 are hovering on the boundary of loss and profit.
Antminer S9 is recognized as the most cost-effective crypto mining machine, which provides about 60% computing power for bitcoin network. According to the information on F2pool’s website, calculated on the electricity charge of 0.28 yuan / kWh (in fact, the wet season has gone and the current electricity charge is much higher than this), Antminer S9 can only bring $0.88 (about 6 Chinese yuan) to the miner per day.
In April, the daily income of Antminer is about 90 yuan (about $13) as the bull market going. The price of Antminer reachd 3000 yuan at that time, but now it falls below 400 yuan.
Bitcoin’s price has dropped by more than 30% in the past three months, while the mining difficulty of the whole network keeps growing. In the past three months, the average computing power of the whole network has increased by 27.5% which means the efficiency of bitcoin mining has been reduced by 27.5% while the reward from mining has been reduced by 30% when it was converted into fiat currency. All in all, miners’ profits fell by 49%.
Individual miners are under the pressure of sharp reduction in price and fierce competition in computing power as Bitcoin price has plunged ahead of halving.
Chinese crypto miners are trying to survive the cold winter in various ways. Some resell their machines to stop losses, and then buy better machines to improve mining efficiency, preparing for the halving next year. Some miners decide to bear the short-term losses, storing the coins and waiting for the halving.
Some miners even going overseas to save themselves. Iran is one of the destinations for these miners. The electricity charge is as low as 4 cents per kWh as the state is rich in natural gas resources. Compared with the cheapest 15 cents per kWh in China, mining here can cut about 73% cost. According to the report in July, Iranian government and the central bank have prohibited the import of mining machines by customs although local laws do not prohibit the crypto mining business.