The crypto mining sector is characterized by intense competition as new technological developments and techniques emerge, and mining firms adopt them as a means to upgrade their systems and services. The recent crypto market crash, however, seems to be a game changer for crypto mining operations throughout the world, especially in China. The dramatic decline has resulted in a similar downward trend in mining profitability forcing Chinese mining operators to sell off their mining devices at a loss.
Some small and medium-sized crypto miners in China are reportedly selling off their mining machines ‘by kilo.’ According to local news sources, few mining firms in the Xinjiang and Inner Mongolia regions of the country have been reluctant to offload their mining equipment as they are receiving a meager 5 percent of their original value. The average prices for secondhand rigs have fallen from about 20,000 yuan ($2,880) a year ago to just 1,000 CNY ($145) currently.
Still, crypto miners are interested in offloading their older models, including Antminer S7, Antminer T9, and Avalon A741, as these have reached their ‘shutdown price.’ The mining industry seems to be at an extreme low so much so that “the earnings from mining are no longer enough to cover electric power and other associated costs,” said Tencent News.
Local Chinese crypto outlet 8BTC reported one such selloff by world’s sixth largest cryptocurrency mining pool F2Pool.
Cryptocurrency markets experienced widespread decline throughout last week, with Bitcoin (BTC) declining to as low as $4,300 per coin. The price of Bitcoin has been deteriorating, along with the other cryptocurrencies, following the hard fork network upgrade of Bitcoin Cash (BCH) on November 15. The update led many cryptocurrency exchanges spread across the world to suspend BCH trading and withdrawals.
Earlier this month, Bitcoin mining giant Bitmain had announced plans to reach out to local mining farms in Xinjiang and deploy around 90,000 Antminer S9 devices in the region.
Back in September, Shixing Mao, Co-founder, and CEO, F2Pool published a list of price levels for major cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Zcash (ZEC) below which mining of the said currency with different miners allegedly becomes unprofitable. As per the infographic, if Bitcoin price would reach lower than 36,792 Chinese yuan (about $5,376), mining the cryptocurrency with an Antminer T9 would become unprofitable.