Crypto Mining Demand Now Exceeds Supply as Bitcoin Price Surge Excites New Interest
The crypto world breathed a sigh of collective relief last week when the price of Bitcoin broke above $10,000, effectively ending a months-long bear market which saw the loss of several thousand dollars in value for cryptos across the board.
This increase in Bitcoin price has coincided with the increase in institutional funds that are being pumped into the crypto industry overall and they are seeing a new phase of maturation within the industry itself.
When bitcoin saw a price slump in late 2018, several prominent firms were forced to close up shop and others were forced to downsize and sell off their equipment. Now that the bear market has ended, and we are seeing growth within the crypto price, the reverse is taking place.
Demand and Supply
The most recent bull run has sparked not just profits for crypto investors but also a demand for new mining equipment which is putting pressure on manufacturers as there is currently more demand than there is supply.
It should also be kept in mind that many of these plans reduced their production rate in the middle of the bear market and now that crypto is seeing a boom there is a sudden increase in demand.
“The surge in bitcoin resulted in increased demand and supplies were already short,” said Steven Mosher, head of global sales and marketing at Canaan Creative, maker of the Avalon miner.
While Mosher did not disclose the details of the firm’s order numbers, he did tell CoinDesk the current state of the industry is that inventories are low but the demand has gotten higher.
There has also been a decrease in the amount of time it will take for mining equipment to pay for itself as previously it took 150 days of making use of mining equipment to make enough money to cover the cost but now it has dropped to 60 days which is a decrease from the previous range of 120 to 280 days.
“It looks like a return to the 2017 Q3, Q4 conditions, where demand was three times the supply,” he said.
In a bid to take advantage of the current market, price Canaan has launched a new mining model in the last month called the Avalon Miner 1041 which, according to its official description, can compute as much as 37 tera hashes per second with electricity consumption at 2,361 Watts per hour.
This is an improvement compared to the previous model The Avalon 851 which computed 14.5 tera hashes per second and consumed 1,451 watts hour. There has also been a healthy demand for such models as Mosher pointed out that pre-orders are filled to as late as October 2019 with a lot of interest coming from large customers who wish to buy in bulk.
Bitmain, another crypto mining company, has released an improved version of its antminer S9 model which is called the antminer S9 SE and S9k in the last week and shipment of the first batch is scheduled for August 2019.
With these changes floating in the air, it is obvious that this resurgence in price is sending benefits to all aspects of the crypto industry.