As crazy as it might seem, prices for secondhand cryptocurrency mining equipment has jumped by almost double in China this year. Wondering why that is? It all comes down to the fact that Bitcoin’s price has been rising over this period and everyone wants in on the action. For salespeople of mining machines, this is a huge opportunity to make some extra cash.
Profitability Raises Prices
Ever since prices started to skyrocket in April, mining machines for Bitcoin has become more profitable than usual. That means they are also more valuable, so individuals are willing to pay more for them. As an example, someone who bought a Bitcoin miner in early April could pay it off with the profits they make in less than a year and sometimes as little as 200 days. This offers people a glimpse of opportunity, which sends them running for secondhand machines to pay off quickly.
However, the incentivized buying of these machines leads to them being worth more to bring the payback time back up over 200 days. Machines like Antminer S9s sold secondhand, have gone up in price hundreds of dollars and if this continues, many who are interested in mining may find it too prohibitive to get involved.
Stockpiling and Out of Stock Miners
There are some equipment wholesalers who are letting would-be customers know they are sold out of some models. This is something that hasn’t occurred in months or even years in some cases. Some believe this is accurate and the miners are simply selling faster than they can come in while others have the impression that miners are being stockpiled to make even more money in the future.
Chinese Market Expansion
In addition to the increase in price for Bitcoin, there is also anticipation about hydropower being available during the summer in China. This is believed also to be driving a high demand for mining equipment. There may be more than a million machines running in the country over the summer, which could lead to a higher hash rate for Bitcoin than ever before.
If the models are all new, that would be about 200,000 new miners on the market. However, if the models are older secondhand miners, this could mean as much as 700,000 new machines are coming onto the network.
While there have been many new and powerful miners put out in the past year, shipping them on a large space takes time and money. Some miners may wish to have the newest models but settle for one that is dated until the miner of their dreams makes it to their location.
One thing is for sure, miners are selling like hotcakes in China and other locations around the globe. Users are willing to settle for longer payback periods to mine Bitcoin more quickly to try to be a part of the cryptocurrency pie. The price and availability of miners may have an impact on whether prices settle or continue to go up.