Bitmain Discounts Bitcoin Mining Machines in an Already Depressed Market

Prices for bitcoin mining rigs have fallen by about 70% this year.

AccessTimeIconSep 21, 2022 at 12:23 p.m. UTC
Updated May 11, 2023 at 4:15 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Bitmain, one of the two largest bitcoin mining rig makers, said it's cutting prices that are already down 70% this year during a crypto bear market and global energy crisis.

Miners have been struggling in a market that has seen the price of bitcoin slide 60% since the start of the 2022, hitting their revenues. Energy, a major operational cost, has surged as flows of oil and gas from Russia dwindled following the imposition of sanctions by governments worldwide after it invaded Ukraine, driving up prices worldwide.

Bitmain said in a Tuesday tweet that it will drop the price of an Antminer S19 Pro 100 terahash (TH) model to $19/TH, about 30% below the market price in an index maintained by Luxor Technologies. Bitmain declined to specify what the price was prior to the discount. But only 200 machines can be bought with the discount, according to terms of the deal posted on Bitmain's website. That means bulk buyers are likely to also purchase the Antminer S19 XP model at over $45/TH, according to Lauren Lin, an operations manger at Luxor's ASIC trading desk.

(A terahash is a metric unit of computing power, or hashrate, on the Bitcoin network. Mining machines, also known as application-specific integrated circuits, are often priced per terahash to help make different models comparable.)

Last year, miners were clamoring to sign advance contracts with Bitmain and its peers, MicroBT and Canaan, as a bull market sent the bitcoin price to a record high, driving up production. Demand has since slowed and the price of rigs has dropped from an average of $68/TH on Jan. 1 to $20.8/TH on Sept. 20, Luxor Technologies data show.

"The market is choking on the volume of new hardware, some that was preordered and financed with the hope of expansion," said Denis Rusinovich, co-founder of CMG Cryptocurrency Mining Group and Maverick Group. An indicator of how much North America was flooded with hardware was illustrated about a month ago, when hardware imported into the U.S. was cheaper by as much as $1.5/TH compared with China.

Based on conversations with analysts, Matt Schultz, the executive chairman of bitcoin miner CleanSpark, estimates that there are 250,000-500,000 new mining rigs sitting in their boxes across the U.S.

"Bitmain's new discount price of $19/TH will definitely lead the rig market to drop further," said Arcane Research analyst Jaran Mellerud.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Eliza Gkritsi

Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.