The price of cryptocurrency miners is likely to continue declining in the near future amid the ongoing crypto winter, according to an executive of major bitcoin (BTC) mining pool F2Pool.
F2Pool supports 14.3% of the BTC network, which is one of the largest bitcoin mining pools in the world. On Tuesday, F2Pool released its latest mining update.
Focusing on bitcoin mining results in June 2022, the F2Pool report indicated that the majority of bitcoin miners like Core Scientific chose to sell self-mining bitcoins recently.
Bitfarms, a major Canadian BTC miner, sold 3,000 bitcoin, or nearly 50% of its entire stake in BTC, for $62 million to reduce its credit facility in June.
“I have studied nearly 10 publicly traded industrial miners and found that they are all very honestly telling everyone that they are selling self-mining Bitcoin,” Lisa Liu, Director of Global Business Development at F2Pool, wrote in the report. It added that the proceeds are used to finance operating expenses and capital increase, as well as to reduce obligations under the equipment and facility loan agreements.
Liu went on to say that only a few publicly traded industrial miners have claimed that they will stick to the long-term HODL strategy. Those companies included companies such as Marathon, Hut 8, and Hive Blockchain Technologies. “In particular, it is surprising that Hive does not have significant debt, nor does it have equipment financing for ASIC and GPU equipment,” she added.
The executive also mentioned that the price of ASIC miners has fallen sharply over the past several months. By early June, prices for upper and mid-tier ASIC miners were reported to have fallen 70% from all-time highs in the $10,000-$18,000 range.
At the time of writing, Bitmain’s flagship Antminer S19 Pro miner is selling on Amazon in the $4,000-7,000 used hardware range. It looks like a new device still sells for over $11,000.
Liu predicted that ASIC prices will continue to fall further, which could lead to a lot of new miners exiting mining, saying:
“I think ASIC prices will continue to fall even though they have already fallen rapidly since they peaked. If equipment owners can’t secure power and capacity at a competitive price, a lot of the newbies who jumped on the retail train last year will likely be dumped.”
Liu stressed that such a situation would be a “worst-case scenario” as F2Pool would like to see “every miner going through this cold winter.”
Related: Crypto miners in Texas shut down operations due to severe heatwave in the state
As of mid-July, Bitcoin mining revenue is down nearly 80% over a nine-month period, after hitting an all-time high of $74.4 million in October 2021. The sharp drop caused a huge drop in GPU prices, resulting in It is finally within everyone’s reach after the chip shortage caused by the global pandemic.