The cryptocurrency mining space is getting unprofitable each day. This is especially true for the miners using the old models of crypto mining hardware. In light of this, the local media reports a major selloff of crypto mining hardware both in China and Inner Mongolia.
According to F2Pool, a China-based mining pool, most of the mining equipment is past their “shutdown price.” An F2Pool branded infographic indicates that mining with Antminer T9 would come into loss-making range if Bitcoin hits $5,376 USD and below.
Fear Spurs Major Selloff of Crypto Mining Hardware
Interestingly, the infographic further elaborated that the shutdown price for Antminer S7 is $11,581 USD. Therefore, many miners are making losses with the prevailing Bitcoin prices.
In light of the losses and still tanking cryptocurrency prices, there is a major selloff of crypto mining hardware. Interestingly, the owners are selling the equipment at throwaway prices.
The falling prices of cryptocurrencies, especially Bitcoin (BTC), sent the miners into a panic. However, the panic got critical when footage on Twitter showed people dumping hardware like scrap.
At the same time, Chinese media reported that people are selling miners by the kilo. This is to say that the crypto mining equipment now sells by how much they weigh in terms of kilograms. Normally, the equipment would sell by unit price.
In light of the fear generated by the reports, miners are selling their equipment at very cheap prices. For instance, 8BTC reports that some miners are grossing for as little as 5% of their original value. This is to say that a miner that previously sold for $2,885 is now worth $144 USD.
Bankruptcy Fears
Further, apart from the tanking prices, there are challenges that other cryptocoins are experiencing. This month, Bitcoin Cash underwent a network hard fork that is proving very controversial. As a result, some cryptocurrency exchanges have suspended the trading and withdrawals of BCH.
Interestingly, these reports come at a time when some mining equipment companies were planning to launch initial public offering (IPO). Already, there are concerns if the IPO dreams of Bitmain and Ebang will go through.
According to Asia Nikkei, regulators are having many questions regarding the valuation of the companies. In particular, some worry that the companies might go bankrupt soon.
Speaking to Asia Nikkei, Leonhard Weese, president of the Bitcoin Association of Hong Kong said,
“I can imagine that regulators are putting a lot more scrutiny on cryptocurrency companies than they would on business models they understand. The sentiment is still that this is just a fad, and why allow companies to IPO that they believe will go bankrupt soon?”
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