[05-03-2019] Bitcoin Mining’s New Bidding War

[Janpie]

The cost of secondhand cryptocurrency mining equipment in China has nearly doubled in recent weeks as a result of bitcoin’s price jump over the same period.

The bull run that began in mid-April has made these machines more profitable to run – and hence more valuable. According to blockchain data firm TokenInsight, as recently as April 8, an investment in most types of crypto mining equipment would take 200 to 350 days to pay for itself.

But bitcoin’s climb from the low $4,000 range in early April to well above $5,000 has resulted in a drop in the payback period (a miner’s price divided by its daily profit) for several secondhand models to less than 200 days.

Read more: https://www.coindesk.com/bitcoin-minings-new-bidding-war

[d5000]

That is not exactly unexpected. I guess the last months were brutal for those selling Bitcoin miners (either manufacturers and second-hand sellers), so it's a little relief for them. People having bought second-hand mining equipment in November and having sold them now should have got a good ROI

However, it's possible that even if the bull market continues, the "bidding war" could come to an end soon: If China realmente bans mining in their country, I expect that mining activity and thus difficulty will go down - at least temporarily, for some months. The market will be flooded with second hand equipment from the Chinese mining farms, and so their price will go down again. That obviously is an opportunity for miners outside of China (I particularly think renewable-based mining should really get a boost then) but hardware sellers won't profit from it. There is one exception: if the bull movement becomes so strong that the higher mining profitability equalizes the negative price effect from the expected "market flooding".

So it's actually a good idea to wait and look if China's ban is really coming or not.

[CryptoBry]

That is not exactly unexpected. I guess the last months were brutal for those selling Bitcoin miners (either manufacturers and second-hand sellers), so it's a little relief for them. People having bought second-hand mining equipment in November and having sold them now should have got a good ROI

However, it's possible that even if the bull market continues, the "bidding war" could come to an end soon: If China realmente bans mining in their country, I expect that mining activity and thus difficulty will go down - at least temporarily, for some months. The market will be flooded with second hand equipment from the Chinese mining farms, and so their price will go down again. That obviously is an opportunity for miners outside of China (I particularly think renewable-based mining should really get a boost then) but hardware sellers won't profit from it. There is one exception: if the bull movement becomes so strong that the higher mining profitability equalizes the negative price effect from the expected "market flooding".

So it's actually a good idea to wait and look if China's ban is really coming or not.

I am sure that soon China will start implementing the Bitcoin mining ban throughout its territories and of course this means that mining equipment from Chinese miners can be flooding the marketplace...a great opportunity to those wanting to join the industry or expand more. The Bitcoin mining industry is soon to experience many changes as we know that majority of mining is done in China. As to which country will be taking over the bulk of the business, this is a good thing to watch.

[stomachgrowls]

That is not exactly unexpected. I guess the last months were brutal for those selling Bitcoin miners (either manufacturers and second-hand sellers), so it's a little relief for them. People having bought second-hand mining equipment in November and having sold them now should have got a good ROI

However, it's possible that even if the bull market continues, the "bidding war" could come to an end soon: If China realmente bans mining in their country, I expect that mining activity and thus difficulty will go down - at least temporarily, for some months. The market will be flooded with second hand equipment from the Chinese mining farms, and so their price will go down again. That obviously is an opportunity for miners outside of China (I particularly think renewable-based mining should really get a boost then) but hardware sellers won't profit from it. There is one exception: if the bull movement becomes so strong that the higher mining profitability equalizes the negative price effect from the expected "market flooding".

So it's actually a good idea to wait and look if China's ban is really coming or not.

I am sure that soon China will start implementing the Bitcoin mining ban throughout its territories and of course this means that mining equipment from Chinese miners can be flooding the marketplace...a great opportunity to those wanting to join the industry or expand more. The Bitcoin mining industry is soon to experience many changes as we know that majority of mining is done in China. As to which country will be taking over the bulk of the business, this is a good thing to watch.

China's Ban in regards with mining would really give out advantage and disadvantage on some factors.The positive to this ban which do breaks out the monopoly
of Chinese miners and would really give out or scattered chances among other miners worldwide.Disadvantage thing, we wont know if it would give out significant price
decrease impact if this ban is fully applied.

[anu1908]

China's Ban in regards with mining would really give out advantage and disadvantage on some factors.The positive to this ban which do breaks out the monopoly
of Chinese miners and would really give out or scattered chances among other miners worldwide.Disadvantage thing, we wont know if it would give out significant price
decrease impact if this ban is fully applied.

what would happen nevertheless is that the average hash power would decrease (unless those miners can find a new place to mine as quickly as possible). that would lead to a possible bottleneck on the network, and possibly affect the price of bitcoin.

i believe a lot of people would start selling their assets in order to book some profits before the bans happened, but it's just a prediction as always.

[buwaytress]

I knew this would happen! Just wasn't expecting it so soon. Was only 6 months ago when price more than halved for even new equipment, and then all those GPUs offloaded even for non-ASIC coins, I knew they had to be some people hoarding and patiently waiting for semi-perfect storm of hashpower drop + price increase, before making instant profits on them hardware.

Not sure this still sub-6k is enough to offset all those months though. This just might create even more pressure to set higher than market prices. Certainly helps explain the thin volumes we're still seeing.

[gentlemand]

Goes to show miners are just as dim as traders.

They bid the shit out of machines all at once, price themselves out of mining with more difficulty changes, offload at a loss and then buy again at the next jump.

As for China's mining 'ban', I hope it's true and I hope it happens. China is a tumour and always has been.

[Kakmakr]

I wonder if a lot of GPU buyers might not be cashing in on selling some of those GPUs that they bought when Bitcoin and Alt coin mining was at it's highest? I would convert my mining equipment <GPUs> into ASIC hardware now, before the demand for those ASIC hardware goes up again.

I also expect a dramatic increase in the Bitcoin price in August and also a increase in the hash power, so people should rather mine with ASIC hardware and sell off those GPUs, if they going to mine bitcoins. 

[1Referee]

I would convert my mining equipment <GPUs> into ASIC hardware now, before the demand for those ASIC hardware goes up again.

I am quite sure that the prices will come down or at least somewhat stabilize. Bitmain's plan is to deploy 200,000 miners themselves, and if this turns out to be real and not just a plan on paper, they will squeeze out most miners buying their gear right now.

Currently the hashrate has been showing a solid uptick with much higher lows. We used to bounce between ~50Eh/s and ~36h/s, where the lows hover around 44Eh/s right now. This surge in hashrate resulted in more block inflation, and also explains why the number of transactions has increased. It's not related to Segwit adoption picking up like people think, but purely more block inflation.

In the end, more mining equipment being bought is cool and all, but it only matters when they are put to work, so it's going to be interesting to see if we can get a peak to 70Eh/s this month (we had a 60Eh/s peak this week already).