27 Jun 2022

ASIC prices haven’t been lower since January 2021

The prices of bitcoin mining machines have fallen off a cliff the recent months and will most likely keep falling.
Source: Hashrate Index
The machines used for bitcoin mining are called ASICs. These machines are priced based on their capability to generate bitcoin (TH/s).At the peak in April 2021, the most energy-efficient ASICs sold for $120 per TH/s. Prices plummeted in the summer of 2021 as China’s bitcoin mining ban led to a flood of Chinese ASICs hitting the market but rebounded in November as bitcoin hit an all-time high.Since November, ASIC prices have been steadily falling as mining has become less profitable. Prices are now at January 2021 levels, with prices halving since the November peak.The plummeting ASIC prices can lead to problems for bitcoin mining companies that have taken on debt positions collateralized by their ASICs. As the value of the ASICs fall, the loan to value increases, forcing these companies to post more collateral.ASICs are now priced similarly as in January 2021, but at that time, mining was twice as profitable as now. Therefore, theoretically, machine prices will need to half in price from today’s levels to account for this profitability difference, if priced at the same multiple.Another reason the ASIC prices will likely keep dropping is the public miners’ massive remaining machine payments, as those who cannot pay for these upcoming deliveries will have to dump them on the market.
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