The leading cryptocurrency bitcoin once fell below $4,300 on the afternoon of November 20, hitting a 13-month low since October 2017. Great losses are seen across the broader crypto market.
Many miners in China have shut down their mining machines especially their older models amid the red chaos, for the earnings from mining cannot cover electricity cost. Older mining models, including Antminer S7, T9 and Avalon A741, have already reached the “shutdown price” (the critical BTC price below which miners have to be shut down for lack of profitability), according to F2Pool, one of the largest mining pools based in China.
Some small and medium-sized mines located in China’s Xinjiang and Inner Mongolia have reportedly been selling their miners in the second-hand market to end this. Ironically, a mining rig is only worth one twentieth of what it was the same time last year.
Mining machines sold on a second-hand market priced from 100 yuan to 1,600 yuan (roughly $15-$200)
However, it is still difficult to sell these specialized machines even at such prices. As a Reddit user commented,
“Almost no one, with good reason, is willing to buy secondhand fans and PSUs from miners. I wouldn’t buy parts from a mining rig even at an 80% discount.”
Bitcoin price has kept falling since the BCH Hashwar, while power supply shortage as a result of the current dry season in Sichuan and other miner-preferred places makes it even worse for crypto mining.
A footage showing what is happening now in a China-based mining site has further fueled market panic. In the footage that went viral last night in the Chinese crypto community, a huge amount of miners are dumped like scrap.
At the same time, founder of F2Pool also posted a picture saying at present miners are sold bykilo. Soon the topic of “Miners sold by kilo” went trending and topped the Baidu search (Chinese version of Google search) this morning. The market is filled with sufferers, among them an investor cried he put in 100,000 yuan but only 2,000 yuan left.
As the news comes at a FUD (Fear, Uncertainty and Doubt) timing, many bitcoiners out of the country claim they are fake news fabricated from last year’s flood in Sichuan China. Dovey Wan, Managing Director of Danhua Capital (an active VC in blockchain investment), replied the news are confirmed by founders of F2Pool and Bixin Pool. Judging from the dressing of the man in the picture above, it seems the picture was taken these days as it has been getting cold in China.
Despite bitcoin crash, there are still newbies coming into the mining game who see a ray of hope as many choose to quit and the mining difficulty may decline. Many veteran miners still hold on there. “It is not that profitable now, but I can still make some money.”
“I still mine on my rig, but that’s because it’s cold and mining is cheaper than running a heater.”
Winter has come, it’s getting cold…