Behind a long bitcoin – Newspaper Kommersant No. 63 (7508) of 04/12/2023
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The cost of cryptocurrency mining equipment has increased by 15-20%, and in some cases up to 30%. Experts attribute the dynamics to the increase in the bitcoin rate. However, the legislative uncertainty of mining in the Russian Federation remains a significant risk for the segment. In addition, by the end of the year, equipment may become cheaper for purely technological reasons.
According to experts interviewed by Kommersant, according to the results of the first quarter, mining equipment has noticeably risen in price. According to emcd., the average cost of equipment has increased by 15-20%, for the most popular positions – by more than 30%. So, if in the fourth quarter of 2022 the average price for ASIC computers for mining was $1.3–1.8 thousand, then by the beginning of the second quarter of 2023 it increased to $1.5–2 thousand. However, the final cost is affected by and the dollar exchange rate, the amount of equipment purchased, etc., noted in the emcd.
ASIC (English application-specific integrated circuit) – an integrated circuit that specializes in solving a specific problem, including individual models used in cryptocurrency mining. They perform a limited number of functions compared to conventional integrated circuits, which is generally faster and cheaper.
The most popular on the market is the flagship equipment, which has high energy efficiency and allows you to get the maximum income, said the commercial director of emcd. Igor Rylnikov. The expert included the M30S+, M30S++, M50S+ models from Whatsminer and S19, S19 Pro, S19 XP from Antminer.
According to market participants, the increase in the price of mining equipment is primarily due to the growth of the bitcoin (BTC) rate, which has increased by more than 80% since the beginning of the year. According to Coinmarketcap, on April 11, the value of the leading cryptocurrency exceeded $30,000, having updated the maximum since the beginning of June 2022. Steady growth has been continuing since mid-March, while bearish sentiment reigned in the market in autumn and winter, and the rate fell below $16,000. However, when the price of BTC was at its historical maximum (November 2021, $69,000), the S19 exceeded 1 million rubles, while now it is 150 thousand rubles.
Manufacturers and suppliers are increasing prices as equipment becomes more cost-effective and profitable, says emcd’s commercial director. Igor Rylnikov. Some legacy ASIC models that stopped generating revenue in the second half of 2022 can reconnect to the network and make a profit at the current rate, he noted. In addition, market participants are becoming more confident that the “bear” period is over and the worst has already happened, says 51ASIC co-founder Mikhail Brezhnev.
The entry threshold for individuals is the cost of one piece of equipment, that is, about 200 thousand rubles, Mr. Brezhnev noted. Estimated payback period now ranges from one year to one and a half years. However, according to Ilya Yakimov, co-founder of Stella mining hosting, there are fewer individuals with small volumes in the Russian Federation, and more and more large corporate clients. The total capacity of Russian mining companies has reached 1 GW (see Kommersant dated April 7).
The main risk for mining in the Russian Federation remains the uncertainty with the regulation of the industry. In particular, it is not clear what size the tax burden will be after its introduction, Mr. Brezhnev points out. The bill on the regulation of cryptocurrencies and mining was submitted to the State Duma in November, but has not yet passed a single reading. Anatoly Aksakov, head of the State Duma Committee on the Financial Market, said at the Russian Financial Market Forum that they could return to its discussion in April.
At the same time, according to Mr. Yakimov, by the end of the year, if there is no sharp increase in the cost of bitcoin, the cost of BTC mining equipment may decrease. Such a forecast is associated with the approach of halving (the process of reducing the speed of generating new units of cryptocurrency), which is one year away. Despite the fact that equipment prices are quite low, before the halving, the return on investment is unlikely to take place, Mr. Yakimov explains. However, according to him, some investors began to accumulate money and BTC coming from mining, “to buy cheaper equipment after halving.”
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