{"id":14180,"date":"2021-09-29T19:25:34","date_gmt":"2021-09-29T19:25:34","guid":{"rendered":"http:\/\/ci028e779700072755"},"modified":"2021-09-29T19:25:34","modified_gmt":"2021-09-29T19:25:34","slug":"bitcoin-mining-asic-prices-surging","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/business\/bitcoin-mining-asic-prices-surging","title":{"rendered":"Why Are Bitcoin Mining ASIC Prices Surging And Where Will They Go Next?"},"content":{"rendered":"
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There could be a number of factors contributing to the rising price of bitcoin mining ASICs, components that are central to the specialized machines used to secure the Bitcoin network in exchange for BTC rewards. Supplies are strained, worldwide shipping lanes are congested, there is growing demand from Chinese miners relocating outside of China, and there\u2019s skyrocketing demand and interest in bitcoin.<\/p>\n

Even COVID-19 has seemingly been a factor, as Whatsminer factories in Thailand and Malaysia were almost forced to close in August 2021 due to the spread of the virus.<\/p>\n

And as the prices of ASICs rise, the most popular mining rigs are as scarce as they have ever been \u2014 Bitmain\u2019s Antminer S19j Pro, for instance, is currently listed at $9,300 on its website<\/a>. All other Antminer products are listed as \u201csold out.\u201d<\/p>\n

\u201cBitmain and other manufacturers are sold out until mid-2022 and the growing North American miners are driving up demand and price for the ASICs that are available on the market,\u201d Luxor Technologies CFO Ethan Vera explained to Bitcoin Magazine<\/em>.<\/p>\n

Unless a mining company has established a preorder or has a fixed contract with an ASIC provider, there\u2019s often a wait until at least Spring 2022 for new equipment.<\/p>\n

But to determine exactly how this ASIC market is shaping the present and future of bitcoin mining, Bitcoin Magazine<\/em> spoke with players on both the manufacturing and sales sides of the equation. And there were two things that all appeared to agree upon:<\/p>\n

    \n
  1. ASIC prices will continue to follow the price of bitcoin, and as it has risen in recent weeks so too have rig price tags.<\/li>\n
  2. A worldwide chip shortage is the main manufacturing bottleneck driving ASIC prices up.<\/li>\n<\/ol>\n

    \u201cASIC miner prices always track the price of bitcoin,\u201d Blockstream CSO Samson Mow said. \u201cThe higher the price of bitcoin, the higher the price of miners. [But] the other factor is the chip shortage, which is constraining supply. It\u2019s possible that the supply of Bitcoin miners may never catch up to the demand.\u201d<\/p>\n

    Rising Bitcoin Price, Rising ASIC Price<\/h2>\n

    Compass Mining\u2019s Zack Voell recently looked at the rapid rise in prices for mining equipment and he estimated that there has been a 25% increase in Q3 2021, a trend he attributes to the rising bitcoin price.<\/p>\n

    \u201cSeeing prices across different categories of ASICs increase between 20-40% this quarter isn\u2019t shocking, given bitcoin\u2019s price rebound over the same period,\u201d Voell wrote in a recent edition of Compass Mining\u2019s newsletter<\/a>.<\/p>\n

    <\/figure>\n

    When The Chips Are Down<\/h2>\n

    Computer chips are the most expensive component by far in an ASIC rig and orders are backed up due to a worldwide shortage in many industrial products, including microprocessors, phones, automobiles and other electronics. It\u2019s specifically the wafers<\/a> which are scarce \u2014 small discs made of silicon that hold a chip together to build integrated circuits.<\/p>\n

    Samsung and Taiwan Semiconductor Manufacturing Company (TSCM), two of the largest manufacturers of these chips, have recently raised their prices in an effort to meet the mounting demand, said Vincent Zhang, sales director of MicroBT, on a recent Compass Mining podcast<\/a>.<\/p>\n

    ASICs used for bitcoin mining constitute less than 1% of Samsung\u2019s and TSCM sales and chip buyers like Apple and vehicle manufacturers are way ahead, Zhang explained. There\u2019s no question, added Vincent Vuong of Compass Mining, on the same podcast, that bitcoin miners are getting \u201csecond-tier treatment\u201d from Samsung and TSCM.<\/p>\n

    What\u2019s Next For The ASIC Market?<\/h2>\n

    While it appears that increasing bitcoin value will continue to drive ASIC prices up, other factors appear poised to influence the market as well.<\/p>\n

    In response to the latest chapter in China\u2019s Bitcoin ban, including an edict that no mining equipment can be sold inside of the country, China\u2019s e-commerce giant , Alibaba announced<\/a> that it won\u2019t be selling mining rigs or related accessories.<\/p>\n

    Starting Oct 15, 2021, Alibaba will shut down two sections of its website: \u201cBlockchain Miner Accessories\u201d and \u201cBlockchain Miners.\u201d<\/p>\n

    And Luxor\u2019s research and content director Colin Harper said that he expects Bitmain is likely to shut down its remaining manufacturing plants in China.<\/p>\n

    \u201cThink ASICs are expensive now?\u201d Harper asked. \u201cNext year is looking like a \u2018hold my beer\u2019 moment for higher prices still, as manufacturers relocate [out of China].\u201d<\/p>\n

    But Mow said that the continuing China shutdown is not a major factor in the price of ASICs. <\/p>\n

    \u201cThe continuing China crackdown (including the latest edict that bans the sale of mining equipment inside China) is great for bitcoin decentralization but isn\u2019t really affecting the price of ASICs,\u201d he said. \u201cThe ASIC market has detached itself from the China market and is much more affected by the ongoing global shortage of chips, which were not manufactured or sold in China in any case.\u201d<\/p>\n

    Zhang is confident that ASIC sales and prices will improve in Q4 2021 and into 2022, mainly due to an improvement in chip availability.<\/p>\n

    Vera sees a coming short-term decrease in ASIC prices as many miners, particularly those emigrating from China, give up on getting established elsewhere.<\/p>\n

    \u201cWe may see short-term decreases in ASIC prices as miners get impatient with infrastructure timelines and deals end up falling through,\u201d Vera said. \u201cAcross North America, there have been dozens of planned mining operations that have failed to deliver this quarter, and many more to come. Major infrastructure setbacks will likely create a period of ASIC sell-offs.\u201d<\/p>\n

    Meanwhile, Voell underscored the tried and true rule about ASIC prices in his own prediction for the future from his newsletter \u2014 the BTC price will ultimately drive the mining rig price. sees<\/a> future prices following bitcoins price:<\/p>\n

    \u201cObviously, whichever direction bitcoin\u2019s price goes, ASIC prices will follow,\u201d he wrote. \u201cCryptocurrency traders and investors have widely disparate outlooks for the market going into the final quarter of 2021. A bullish market would be kind to paper gains on machine values for miners. A bearish outcome could be a nice gift for miners looking to procure more machines.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

    The prices of ASICs, computing components central to Bitcoin mining, have surged this year. But why? And where will they go next?<\/p>\n","protected":false},"author":2916,"featured_media":5793,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[198,189,197,347,1831],"class_list":{"0":"post-14180","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-asic","9":"tag-bitcoin-mining","10":"tag-bitmain","11":"tag-china","12":"tag-martys-bent"},"author_data":{"id":2916,"name":"Jessie Willms","nicename":"jessie-willms","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/34e39b2d2b80d0f1b4eaf183ca23eff71d1e903536d749658f27936a80197dee?s=96&d=robohash&r=g"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/mining.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/14180","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2916"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=14180"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/14180\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/5793"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=14180"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=14180"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=14180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}