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Biggest Mining Gear Maker Halts Sales Amid China Crypto Crackdown

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(Image credit: Shutterstock)

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.

  • InvalidError
    With Bitmain not shipping product until several months after they should be ready presumably due to extensive "in-house testing" (aka: mining for themselves), I wouldn't be surprised if the sales pause was to cash in on the network hash rate dip at a time of depressed market demand and prices.
    Reply
  • daworstplaya
    More good news. Hopefully this frees up chip resources for companies that can put it to more practical use, like GPUs and ECUs for car manufacturers, instead of creating fake money.
    Reply
  • mrv_co
    Is there a quantification of 'most' with regards to China's % of worldwide crypto mining?
    Reply
  • InvalidError
    mrv_co said:
    Is there a quantification of 'most' with regards to China's % of worldwide crypto mining?
    At its peak, it was estimated that 75% of all crypto was being mined in China.

    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.
    Reply
  • Math Geek
    i have 100% confidence the chinese gov will still mine at will, they just want the regular people to stop so they can keep their stranglehold on the money supply there.

    i don't expect the overall hash rate to dip that much really for very long.
    Reply
  • Co BIY
    If the prices for their ASCICS drop very much then it may be better to sell their 5nm wafer-starts back to TSMC than to produce the new chips.
    Reply