Uneven demand across the Bitcoin market has been a significant problem since the year began. With investors soaking up more of the asset, miners have also been working round the clock to ramp up production.
Now, the problem appears to have begun affecting rig manufacturers, who now have an inventory shortage.
Rigs Out of Stock
Yesterday, Reuters reported that Bitcoin mining hardware manufacturers had seen significant inventory shortages, following upscaling efforts by several mining firms.
According to the report, Bitmain, the industry’s top mining rig manufacturer, has sold out of its inventory and most likely won’t have anything in stock until August.
Asides from being unavailable, these rigs now sells at a significant premium. Per industry news sources, a unit of Bitmain’s flagship Antminer s19 sold for $1,897 as of November 2020. However, the company’s website shows that the device now sells for $4,767.
So, anyone looking to purchase the device – which probably won’t be available for months – will be doing so at a 45 percent premium.
The current inventory shortage – especially for Bitmain – has been due in large part to expansion efforts from mining companies in North America. Last month, the Marathon patent Group, a Nevada-based mining firm, announced that it had purchased 70,000 Antminer s19 rigs from Bitmain at a $170 million cost. The delivery, which will run from July to December, adds to the 10,500 S19 Pro rigs that the company purchased in October.
Riot Blockchain, a Colorado-based firm, has emerged to be Marathon’s primary competitor. In December, the company also announced that it had bought 15,000 Antminer rigs from Bitmain, comprising 12,000 Antminer s19j Pros and 3,000 s19 Pros. Delivery and deployment will run from May to October.
Blame the Deep-Pocketed Investors
These are just two companies. There is little doubt that several other firms will be clamoring for more mining rigs as they look to upscale their operations and meet the surging demand for Bitcoin. The increased demand has primarily been from retail investors, who now appear to be feeling the crunch resulting from an influx of institutional, long-term investors.
Earlier this week, market data provider Glassnode reported that “liquid” Bitcoin wallets have shed 270,000 BTC this month – up from 175,000 BTC in December. The data showed that the liquid supply of Bitcoin had been consistently dropping for the past nine months, sitting at 21.3 percent and showing no signs of increasing.
Many heralded the influx of institutional investors into the market last year as a sign that Bitcoin was gaining traction as a store of value and a viable investment asset. However, considering that these investors tend to hold assets and not do much with them, day traders have been left with no assets to conduct activities with.