Bitcoin Global News (BGN)
May 7, 2019 -- ADVFN Crypto NewsWire -- March and April of this year were two of the most stable times for Bitcoin’s price since 2016 when the price remained below $1,000. After spending the previous two months trending near $4,000, the price of Bitcoin is now nearing $6,000. Although many still view Bitcoin as an investment, this price change creates direct impact on a number of related industries, namely the mining process that secures the Bitcoin network and facilitates transactions of the cryptocurrency.
In the early years of Bitcoin, anyone could use their normal computer to run mining software, and potentially earn a small income from the process. However, as the price rose, development of equipment tailored for this process evolved in proportion. This coincided with big improvements to computer hardware across the board, which helped push novel ways of mining. Normal computers (CPUs) were quickly outpaced by miners using graphics cards (GPUs), and eventually ASIC computers took over the market with their superior performance.
Used Mining Equipment Market
During the massive price surge of all cryptocurrencies in late 2017, the shelves of stores selling GPUs and ASIC miners were left empty, and many computer hardware companies began producing mining specific hardware to meet the demand. However, when the price fell dramatically in early 2018, the situation flipped. These companies stopped producing new machinery, as the market had been flooded. But now there is a growing market for second hand mining equipment - especially in China, the world’s leader in Bitcoin mining.
The price of used ASIC miners has nearly doubled to between $250-$320 for old Bitmain Antminers. This was one of the earliest, most popular miners. Newer models are now sold for roughly $1,000. Although they are cheaper, because of decreased performance of older models, the payback period for either choice is roughly 200 to 350 days.
“When the payback period is apparently below 200 days, it has made more miners feel there’s an opportunity. That further incentivizes their buying demand for secondhand models and leads to a price jump and will bring the payback period back above 200 days again.” - Michael Zhong, a mining analyst at TokenInsight
Until the price of Bitcoin reaches roughly $8,000, it is unlikely that any of these mining equipment companies will release their newest models. Because of this, the secondhand market could continue to grow. However, if the volatility of Bitcoin’s price nears anything close to 2017, a move from $5,000 to $8,000 could happen in just a few days time.
By: BGN Editorial Staff