The mining industry is growing exponentially, and mining machine manufacturers may become the biggest beneficiaries

In April, Bitcoin saw six consecutive positive monthly increases for the first time in eight years. The increase in the first quarter has exceeded 104%. The Bitcoin mining industry has also been booming, not only attracting the attention of many companies seeking to obtain high profits, but also driving the exponential growth of the entire industry ecosystem.
After two years of dormancy from 2019 to 2020, upstream mining machine manufacturers have ushered in a big explosion of "streets are empty and machines are hard to come by"; midstream agents and mine owners have all enjoyed the dividends brought by the bull market, with mining machines continuing to be at a premium and quarterly increases of more than double, mining farm hosting in short supply, and a large number of second-hand models waiting to be put on the shelves; on the miner side, the daily block reward of Bitcoin exceeded 50 million US dollars in the first quarter, and the soaring price of the currency shortened the payback period of Bitcoin mining machines several times. The bull market in the Bitcoin mining industry is attracting unprecedented attention from both inside and outside the industry.
The daily gross profit of mainstream mining machines exceeds 200 yuan. In the mining cycle, the rise in coin prices, the increase in computing power, and the increase in difficulty have formed a causal chain reaction. According to statistics, the computing power of the entire Bitcoin network in 2020 increased from 103.44EH/s at the beginning of the year to 161.1EH/s at the end of the year, with an annual increase of about 55%, a sharp drop from the 143.59% increase in the computing power of the entire network in 2019. Compared with the 304.74% increase in BTC prices in 2020, the moderate increase in computing power enables miners to obtain excess profits.
From the perspective of mining machine product iteration, mainstream mining machines are limited to 40J/T, and the maximum computing power can currently reach 110Th/s, including the Ant S19 series, Shenma M31 series, Avalon A12 series, etc. Since Bitcoin broke through the 60,000 US dollar (400,000 RMB) mark, the daily gross mining income of miners holding mainstream mining machines has exceeded 200 yuan.
Due to the explosive growth of the entire market and the exposure of the rise of Bitcoin through traditional channels, more and more new players have begun to pay attention to the field of digital currency and started to participate in investment. Large overseas institutions and large companies have entered the market. Even though there are cyclical fluctuations in the industry, it is undeniable that Bitcoin mining is rapidly moving towards scale and there are occasional myths of wealth creation.

The price increase of mining machines has outperformed the price of coins, and buying and selling mining machines is a good business . In March, Bitcoin increased by about 30%, while the average increase of spot mining machines in the secondary market was 32%. Since the fourth quarter of last year, the average increase of mainstream models has been above 30% almost every month. The new model launched by Avalon at the end of last year has increased in price by about 4.4 times since the fourth quarter.

Looking at the entire market, the global market size of blockchain hardware (mining machine market value alone) has increased 1,027 times from US$17 million in 2013 to the current US$17.47 billion. Canaan Technology, which has just released its fourth quarter report, has seized this "good business". The company's orders in the second half of 2020 increased significantly, with orders exceeding 92,000 units in the fourth quarter. As of the end of the first quarter of 2021, the company had pre-sold more than 156,000 mining machines and received more than 1.547 billion yuan in advance, and the company's gross profit margin turned from negative to positive at 23%. Canaan Technology, which has made huge profits in the mining machine market, has also performed well in the capital market. Its stock price has soared 19 times in half a year, becoming the "wealth code" in the eyes of investors inside and outside the circle.
Due to the chip shortage, the growth rate of Bitcoin mining computing power in 2020-2021 is relatively weak. If the computing power remains unchanged, the competitiveness of the mining machines currently in the market will be relatively strong, and the mining yield rate will continue to remain considerable. At the same time, due to the shortage of spot goods, it can be estimated that the market for mining machine futures will continue to grow in the future.
In general, this year is likely to be a year in which mining machine profits exceed the growth of Bitcoin, and the breakthrough of mining machines may even be greater. The initiative in the market will be firmly in the hands of sellers (manufacturers and agents).