It’s no longer news that Bitcoin mining has been banned in China by the Chinese government. However, interested mining equipment buyers can visit physical retail stores in Shenzhen to pick up a Bitmain Antminer. To keep our subscribers abreast on the latest information on cryptocurrency and mining in general, our reporter Mia Tam visited the key players; the resellers of Bitcoin mining equipment in Shenzhen area to hear their different views on the crisis presently facing Bitcoin mining in China.
From concerns over the exorbitant tax levied on Bitcoin mining equipment and other crypto mining machines importation in the US to the business in general and their expectations about ASIC space future.
As reported in our previous updated, recently the US government increased the tariff on Bitcoin mining equipment in the US from 2.6% to 26.7%. This has generated a lot of controversies in the cryptocurrency industry with many crypto experts unsure of the extent of the new tariff on cryptocurrency.
Coupled with the declining market value of cryptocurrency, we explore topics such as Return on Investment, second-hand value for ASICs, global sales, and the leading brands in competition.
The first interviewee on our radar is a young man into the selling of mining rigs; he believes that the new tariff will not have a significant effect on the local market. He, however, stated that he quitted international trading in some few months away citing the rise in the dollar as compared to the fall in the value of Chinese RMB.
Another young vendor of mining rig who spoke with our correspondent has a contrary opinion to the first interviewee. He stated his belief that the new tariff will have a critical effect on the Bitcoin mining business in China. To back up his view, he reminded our reporter how mining rig was cheaper in some countries compared to China before the unwelcome news. He affirmed that with the new 26% increment on tax, the US market price would be rendered less competitive which denotes that miners will wait for a longer time before they can get a return on their investment.
Stating his point further, he believes that the 26% tariff will be a welcome development regarding increased cost for the Americans if the value of cryptocurrency should go up.
He rounded up by saying that he expects the new tax not to have a massive impact on crypto business as long as cryptocurrencies can maintain a reasonable market value as interested people will make a purchase irrespective of the situation.
Another responder, a woman in her mid age maintains that the business has hard to sustain regardless of the new tax. She cited the fact that a lot of dealers fail to recoup their expenses for the month and some had no option but to fold up.
In his discussion, the first responder stated that people no longer show interest in getting a mining rig as Bitcoin mining is getting harder day by day.
As reported, miners pocketed between 100 to 200 RMB ($14-28) on a daily basis giving the miners the opportunity to have a return on investment within a short period. Presently, miners can only earn a measure 10 RMB ($1.5) per day.
Speaking to our reporter, another interviewee explained that it’s difficult for dealers to make a profit as they are afraid to stock up their store as stocking is equivalent to the loss of investment.
In contrast, one of the responders argues that Bitcoin mining remains profitable, but maintains that it takes considerable lower time for miners to get return whenever crypto price hit low and sometimes it takes 10-11 month to get a return whereas, at a high price, the duration is slashed to around 5 months.
He further stated his opinion that every other investment will struggle to compete with crypto mining.
Our woman vendor also explained the drop in return as with Antminer S9 14.4; miners can only make about 20 RMB (2.8) in a day excluding including the electricity cost leaving a ridiculous 10 RMB as the net profit. She further stated that same thing applied with the use of Antminer L3+ and forecasted that every operation will soon be shut down as many miners now rely on the purchase on used equipment which they may struggle to maintain such a critical condition at the long run.
She showed cards displaying the intent to sell old rig by one of her customers as he can no longer bear the electricity cost. However, she maintains that crypto traders have higher loss compared to the miners.
Our interview made an inquiry as to which mining rigs our responders sell. The result shows that they all have three companies as their most popular brands; Bitmain, Innosilicon, and Shenma. Of all the three brands, Antminer from Bitmain ranks as the best seller.
Stating the prices of Antminer S9 13.5T, one responder informed our reporter that the price was set at 30,000 RMB (approximately $5,000) before the commencement of Chinese New Year. As for the present price, he told our reporter that a brand new Antminer S9 now goes for 1, 000-2,000 RMB with a minimum order placed at 200 mining rigs.
Another responder corroborated the fact that Antminer products remain the best seller as many people prefer to purchase the product due to the company’s legitimacy. Dealers with a special coupon can order directly from Bitmain website with the chance to sell 10-20% below the official price.
As Bitmain is reluctant to sell to the US, they have alternatives in Korea, Japan, Russia and other markets.
All our correspondents affirmed that the customers from other countries such as UAE, Canada, Russia, Korea with the chunk of the customers coming from China.
One of our responders showed a great deal of optimism in crypto business as it has broken several trade barriers in the past. One of the instances he cited was despite not being convenient to trade currency; free trade is achievable with bitcoin.
Our woman responder believes that whoever makes money for crypto presently must definitely be highly experienced with better access to beneficial information.
Speaking on the competitors of Bintcoin mining chips manufacturers in other countries, our responder argues that despite many competitors in Japan and Korea, they can in no way match the Chinese manufacturers as the lack the ability to produce in mining rigs in mass.
For instance, information reaching him from Japan confirms that with a rig equivalent to 3,000 Antminer S9, they can only boast of two rigs per month which pose no threat to Bitmain as the leading manufacturer of mining rigs.
The Chinese government might be secretly delighted with the present crypto condition based on their bans on ICO and the new blockchain regulation on China sending those interested in crypto mining to an all-time low. Our responders aired their opinions.
Our woman responder stated that as the Chinese government has not publicly declared bitcoin trading or rig mining selling illegal, she holds a firm belief that ICO, Fundraising and other related activities were banned due to the danger of scam which works for the interest of the public. She concluded by stating her opinion not to give up on the business and keep up with the struggle.
What’s your perspective on the bitcoin crisis? Has crypto hit rock bottom? Will it come back stronger like it usually does? Let’s hear your opinion in the comment section below.
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