TSMC warns: If Bitcoin falls below $8,000, it will have a serious impact on mining chips

The cryptocurrency "mining" market is facing headwinds. TSMC dropped a bombshell, warning of rising uncertainty in cryptocurrency demand. This also shows that this year, as governments and Internet giants work together to strengthen regulation, cryptocurrencies are facing strong challenges. Foreign investors estimate that once the price of Bitcoin falls below the $8,000 mark, it will have a serious impact on the mining market.

TSMC held a legal briefing a few days ago and revised down its second quarter and full-year financial forecasts. In addition to the fact that smartphone demand was lower than expected, another major focus was the increased uncertainty in demand for cryptocurrency mining. Since TSMC's Bitcoin-specific ASIC (application-specific integrated circuit) chips have a customer base that includes mainstream "mining machine" companies around the world, TSMC's warning has attracted special market attention. However, TSMC pointed out that although it is conservative and cautious about the outlook for cryptocurrency, the performance of related businesses in the second quarter is still better than the first quarter, and the second half of the year will also be better than the first half of the year, indicating that Chinese mining machine companies are still optimistic about the future and expect cryptocurrency prices to remain supported, so they are not soft in placing orders.

According to research by US-based foreign investors, assuming that miners' electricity costs are 0.03 kWh/kWh, the break-even point for large mining farms is $8,600. If the price of Bitcoin is not above $8,600, large miners will find it unprofitable in the long run, which will trigger a selling spree, which will not only drag down market hardware demand but will also further lower Bitcoin prices.

In addition, as mining capacity continues to increase, mining difficulty will inevitably increase in the second half of the year. Even if the price of Bitcoin remains flat in the second half of the year, the profit from mining will decrease. This is because Bitcoin was originally set with a "limited" rule, with a total supply of only 21 million coins. As more coins are released, 80% of the total supply has been mined so far this year. The system design will make mining more difficult and the rewards relatively lower for miners.

The external environment is not very friendly to the cryptocurrency market. Concerned that cryptocurrency could become a tool for criminals to launder money, the Chinese government has tightened regulations in Japan, South Korea, the United States, the United Kingdom, and Australia since last year. Not only the government has taken action, but Internet giants have also followed suit, including Facebook, Google, and Twitter, which have banned cryptocurrency advertising to prevent consumers from being defrauded by those with ulterior motives.

In fact, after the explosive rise in the price of Bitcoin last year, hundreds of new currencies have emerged in the market. Although ASIC chips on the market are mainly used in the production of Bitcoin and Litecoin, coins like Ethereum and Ripple still use graphics cards for mining. However, because Bitcoin is the most famous and has the largest trading volume, it is the leader in cryptocurrency. Once the price of Bitcoin fluctuates, it will also directly affect the rise and fall of other cryptocurrencies.