ASIC Miners Prices Near ATHs as Impact of China Ban Fades

Prices of application-specific integrated circuit (ASIC) miners are edging closer to their all-time highs as the Bitcoin network records its eighth consecutive mining difficulty increase since China’s ban, according to the latest Luxor Mining hash update. 

Luxor Mining, which provides analysis, data, and hash rate insights, states that hashprice surpassed its yearly high on October 20 and hashrate is close to where it was before China’s mining ban which triggered the hashrate migration. 

 

After the China ban

The Bitcoin mining difficulty increased by 7.8% this time to recover to 93e22 hashes, according to onchain analytics firm, GlassNode. It adds that the increase means that each Bitcoin block now requires 930,000 Exahashes to solve the required computational equation at an average block time of 10 minutes.

The summer dump that followed China’s mining ban contributed to the fall of crypto mining-related components like rigs and hashes in April, May and June, Luxor Mining notes. The autumn pump in Bitcoin price played a major factor to fuel their recovery, it adds, hinting that a break above Bitcoin’s new all-time high of $66,500 and the market’s ability to hold this support level could push mining rig prices to new highs.

This assumption is somewhat supported by GlassNode’s data which shows that Bitcoin network  transaction value settlement (NTVS) – a 90-day moving average daily transaction volume leading indicator – has been rising relative to the market cap and driving signal metric lower. The firm notes that the NTVS’ rise also indicates that even at $61,800, Bitcoin is “historically undervalued relative to utilisation as a value settlement layer.”

Moreover, there have only been five previous difficulty adjustment windows that were higher than the latest. All of them were followed by a market rise and pullback.

 

#Bitcoin transaction value settlement is rising substantially relative to the Market Cap.

This has driven NVT Signal metric lower, indicating that even at $61.8k, $BTC is historically undervalued relative to utilisation as a value settlement layer

Chart: https://t.co/BRG2mT1Aet pic.twitter.com/yVUsYZWaLd

— glassnode (@glassnode) November 5, 2021

 

Other factors that aid ASIC prices recovery

After the Chinese government’s ban in May, hash and price action slowed down. Luxor Mining’s latest update is suggesting that the situation is normalizing as it tracks five Bitcoin mining rigs whose average prices have started rising slightly over the month of October.

It says the five rigs tracked are closer to their yearly high – S9 (19.2%), S17 (10.2%), S19 (10.7%), M20 (20.3%) and M30 (3%) – with the M30 series recovering the most since the post-China ban dip. 

Aside from the Bitcoin price mentioned earlier, other factors that are impacting the recovery of, and likely to boost, ASIC prices according to Luxor Mining include the semiconductor shortage, supply chain issues, and manufacturing hiccups. 

Others are an end to the panic-selling that followed China’s mining ban which saw  the resale market flooded with old and new rigs thus dropping their prices and Bitmain’s rumoured moving of its manufacturing capabilities out of mainland China.

Bitmain’s movement is significant because it is the manufacturer of the most popular brand for ASIC Bitcoin miners. The company confirmed last month that it will stop shipping its Antminer mining machines to mainland China (excluding Hong Kong and Taiwan) in compliance with Chinese laws. 

Its relocation, Luxor Mining had earlier suggested, could “send bigger wrinkles through the already-severely-ruffled ASIC supply chain”. In other word, Bitmain moving its production unit elsewhere would make the prices of ASICs – which were already expensive to acquire and run – become even more expensive with time.

 

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