The crypto catastrophe is upon us and everybody has their way of reacting to the market’s rapid decline over these few weeks. Some just sell it off and don’t think about the massive losses they have inflicted upon themselves. Others remain hopeful that the market will soon become bullish and everybody will calm down. But for large companies in China, hope is not profitable, which means that its time to sell off most of their equipment and potentially close their doors for good.
8BTC a Chinese crypto news outlet has documented the fact that large Chinese mining companies have been selling off their equipment like there’s no tomorrow. In the wake of the ongoing crash, companies are not able to maintain a healthy business model and are forced to cash out their hardware while they still can. But the way they’re trying to save at least some money is by selling the equipment in weight and not in units. Seeing how the prices dropped it wouldn’t be a surprise to see people buying 20 miners for the price of 1.
The reason why they’re selling is obvious, it’s just not profitable anymore. Sure they can sit back and wait until the market revives itself, but before that happens they have huge fees to pay in terms of maintenance. So why lose money on a risk they’re not willing to take? Hence the massive sell-off.
Just like any other hardware, older models get worn out quickly, they become outdated, especially in the fast evolving environment of Blockchain, so it’s no wonder that the miners are trying to get rid of the older pieces the most. You would expect the price to be at least 60-80 percent of what they initially paid for them, but you’d be wrong as the desperation has kicked in and lowered the prices to an unbelievable 5% of the initial one. For example, the Avalon 741, Antminer T9 and other older pieces of equipment are selling for about $144 currently when their initial prices were nearly $3,000 about a year ago.
All of these sellings boil down to the recent hash war that has been raging between the service providers and operators. Thanks to the recent software update called the hard fork, the industry is pretty much split into two parties, with different ways of dealing with the problem. This is the primary reason we’ve been seeing the price go down so much over the weeks, it’s just not as safe anymore. The companies like Bitmain are taking it quite seriously trying to convince peers of joining their way of dealing with it. Thus creating more skepticism and dividing the industry more.
Whether or not the hash war will contribute to the price fall, even more, is yet to be discovered. But judging by the damage it has already done, it’s quite realistic that it has more punches to dish out.