Mining Games, ASIC Prices, and Exchange Flows

Published: Tue, 07/13/21

July 13, 2021
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Market Overview

Data as of 12:00 UTC

Here's why ASIC prices lag behind bitcoin.

ASIC prices matter to miners just as much as bitcoin’s price. Since the market’s peak in mid-Q2 2021, prices for both commodities (BTC and ASICs) have dropped considerably. But observing the relationship between the two prices offers an interesting insight into the mining sector’s reaction to bitcoin’s price action.

Although the price declines for bitcoin and mining ASICs have been roughly equal, the downward trends did not start or progress in sync with each other.

Two key reasons explain the lag between ASIC and bitcoin prices. For one thing, since hashrate is already known to lag behind bitcoin’s price movements, ASIC prices not similarly lagging behind would be surprising.

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Binance and Huobi are still the top destinations for bitcoin miner deposits despite exchange crackdowns.

Miners aren't deterred from depositing funds on Binance and Huobi despite a wave of notices against the exchanges by financial regulators.

The two exchanges still account for an estimated 60% of all mined coins hitting exchange wallets out of exchanges surveyed by Coin Metrics data. (Coinbase data is excluded due to wallet obfuscation techniques.)

Over the last 90 days, the UK’s Financial Conduct Authority, Japan’s Financial Services Authority and other regulatory bodies have issued various legal letters to Binance. Huobi has also shut down much of its operation in China following the general crackdown.

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Here’s what’s happening to bitcoin mining in Kazakhstan.

Regulations are changing for bitcoin miners in Kazakhstan after serving as a top destination for the industry since the late 2010s. Starting in 2022, a new law passed by the Kazakhstani government will tax cryptocurrency mining revenue for the first time.


No one likes taxes, but the policy change is well timed for the government’s interests. Many Chinese miners leaving their Asian farms behind are relocating to Kazakhstan. On top of the large mining presence already in the region, the new tax bill is expected to generate billions of dollars in revenue.

As of April 2020, Kazakhstan accounted for over 6% of the global Bitcoin hashrate. At least  14 separate mining farms also operate in the country, as of estimates from July 2020, although the estimates are difficulty to arrive at since there are no registration requirements for bitcoin miners, unlike other countries such as Iran.


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Play the bitcoin mining board game!

Some friends of Mining Memo gave us some free stuff to giveaway, and we're excited for some of our readers to receive the prize: a SHAmory game. 


This is literally a board game about bitcoin mining. From creating new blocks to adapting to difficulty adjustments, this game has it all. This is not a paid promotion. We just like the game, and we want you to play it. 


Two readers get free games. Everyone else can buy at a 10% discount. For a chance to win, just reply to this email and say, "I want the game." Winners will be chosen by Friday.

    Compass Updates

    Proof of Work Overview
      * measured by $/TH/s

        Mining Newsfeed

        🧭 Bitcoin’s hashrate is slow to recover.

        Lots of eyes are watching Bitcoin’s hashrate after its precipitous drop over the past couple of months. Still sitting below 100 exahashes per second (EH/s), hashrate is not showing signs of a speedy recovery. Chinese miners are still scrambling to relocate their machines, and rackspace is still in short supply.

        🧭 Look inside this WhatsMiner ASIC.

        If you’ve ever wondered what’s inside the machines that mint bitcoin’s, here’s the answer. View a collection of photos from the Compass team as we disassemble a WhatsMiner M32.

        🧭 PandaMiner lost a ton of hashrate last week.

        In May, PandaMiner was a top 20 ether mining pool with over 2.5 TH of hashrate, or 0.5% of the network. But like plenty of other ether pools , it has not escaped the crackdown in China. In the past week, PandaMiner has lost over 80% of its hashrate, dropping to around 0.6 TH/s.

        🧭 Bitcoin’s mining difficulty is set to drop again.

        After the record-setting -28% drop in early July, bitcoin’s mining difficulty is currently estimated to be set for another -8% drop on or around July 18. If it happens, difficulty will drop to just above 13 trillion, a level not seen since January 2020.

        🧭 Mempools are emptying very frequently.

        With low hashrate and transaction activity, Bitcoin mempools are emptying frequently, which should be good news to users facing little-to-no outsized confirmation delays for their bitcoin spends. In July, over 100 blocks have seen mempools emptied, continuing a trend from June.

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        Quick Bits

        • An unidentified mining pool put a message in a recent block that said it was mined “with a carbon negative power source.” 

        • Ukrainian law enforcement are raiding illegal mining farms. 

        • Compute North plans to add 1.2 GW of colocation mining capacity. 

        • EU lawmakers want to push for more mining to be powered by renewable energy.

        • Hive will almost double its hashrate once its latest order of ASICs fully arrives. 

        • Argo is exploring its options for a Nasdaq listing.

        • MintGreen wins the “most sustainable” category in NexStream's Tech Competition.

        Written by Zack Voell and Will Foxley. 

           

        About Compass: Compass is a Bitcoin mining and modern media company focused on driving the mass adoption of cryptocurrency mining.

          

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