With the falling Bitcoin price, the miner’s profitability has gone for a toss resulting into major bankruptcies and ultimately pushing the price of ASIC miners to a multi-year low.
The year 2022 witnessed some of the harshest crypto winters in the history of the markets. The world’s largest cryptocurrency Bitcoin (BTC) continued its downfall correcting more than 65% year-to-date and is currently trading at $16,800 levels. As the price of Bitcoin has been on a constant decline, it has majorly squeezed the profit margins of Bitcoin miners. On the other hand, the rising energy costs have further added to the operational woes faced by Bitcoin miners. Over the last few months, some of the biggest Bitcoin miners like Core Scientific and others have filed for bankruptcy. As this happens, the price of Bitcoin ASIC miners has considerably dropped as demand reduces along with the fall in the number of market competitors.
As a result, Bitcoin ASIC miners are currently seen at prices last seen in 2020 and 2021. This also reflects another sign of a major crypto bear market. The data from Hashrate Index shows that the most efficient ASIC miners which generate at least one terahash per 38 joules of energy have seen their prices fall by 86.82% from May 7, 2021 peak of $119.25 per terahash down to $15.71 as of Dec. 25.
In this category, some of the Bitcoin miners selling ASICs include MicroBTC’s Whatsminer M30s and Bitmain’s Antminer S19. A similar scenario holds true for mid-tier machines.
The prices of these mid-tier ASICs have dropped by 89.36% from its peak price of $96.24 on May. 7, 2021. to now averaging around $10.23. But the least efficient machines which require over 68 Joules per TH, are priced at $4.72. This is a 91% drop from its peak price of $52.85.
Major Bankruptcies Faced by Bitcoin Miners
As said, the crash in the ASIC miner prices can be attributed to the large Bitcoin mining companies which are struggling to remain profitable throughout the entire bear market this year. Amid huge debt and falling profits, several private and public-listed Bitcoin miners filed for Chapter 11 bankruptcy over the last few months.
This includes names like Riot Blockchain, Marathon Digital, Core Scientific, Agro Blockchain and Bitfarms. However, the recent steep fall in the price of ASIC miners has also seen new buyers like Russia-based mining facility BitRiver. They are capitalizing on low electricity costs and some up-to-date hardware capable of mining one BTC at about $0.07 per kilowatt-hour in the energy-rich nation.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
