Bitcoin miners could be stuck with used rigs for a while. Bloomberg today reported that Bitmain indefinitely halted most of its sales after Chinese mining operations started dumping their equipment because they're being forced to shut down.
Bitmain makes cryptocurrency mining equipment based on application-specific integrated circuits (ASICs) designed specifically for that purpose. The company is best known for Bitcoin and Ethereum-related tools, but it supports other coins, too.
The crypto market's struggles appear to have directly affected Bitmain's financials. Bloomberg reported that the price of the company's "top-tier rigs plunged by about 75% since April." The price of Bitcoin fell more than 50% in that same timeframe.
Halting its sales is supposed to give Bitmain a chance to stabilize the price of its products. (It says it wants to give mining operations a chance to sell their used equipment at higher prices, too, but we doubt that's its primary motivator.)
The company hasn't disclosed when it plans to resume its sales. It should probably be sooner than later, though, based on reports that TSMC plans to start producing a mining-devoted ASIC based on its 5nm process some time in the third quarter.
Bitmain could theoretically modify its order, but as the automotive industry has learned throughout 2021, fabs don't take kindly to changing demand. It wouldn't be hard for TSMBC to find someone else willing to buy 5nm chips in Bitmain's stead.
There is also the question of who'd be willing to purchase Bitmain's mining equipment when sales do resume. China was responsible for most of the world's crypto mining; it will take time for miners in other regions to make up for that loss.
Bitmain does seem to have something resembling a contingency plan: Bloomberg said the company "will continue to sell gear for future delivery of devices used to mine smaller altcoins." Maybe it's time to start looking into ASICs for Dogecoin.
Since the CCP makes it nearly impossible to take money out of China, I can see why wealthy Chinese people would be interested in converting their wealth to crypto so they can cash it out elsewhere, same for people who just want to GTFO from China and bring what wealth they could manage to convert into crypto along.
i don't expect the overall hash rate to dip that much really for very long.