Since the beginning of 2021, Bitcoin continues to gain momentum. On January 6, the price of a Bitcoin exceeded 35,000 U.S. dollars. It took only half a month from breaking the 20,000 U.S. dollar mark to 30,000 U.S. dollars. Under the explosion of mining demand, the production capacity of mining machines has also encountered challenges. At the same time, the production capacity of upstream chip foundries has begun to come under pressure, especially the demand for 5G and consumer electronics has also grown simultaneously.
Looking back at the past 2020, Bitcoin's growth rate is close to 350%. Driven by the hot market, the mining income of miners has risen accordingly, which in turn promotes a surge in demand for mining machines. Major mining companies have purchased more high-power mining machines. Mining companies hope to take advantage of the current high currency prices and the increasing difficulty of mining to obtain more stable mining revenue by increasing computing power.
It is reported that the American cryptocurrency mining company Marathon Patent announced on December 28, 2020 that it would purchase 70,000 S-19 Antminers equipped with ASIC chips from Bitmain at a price of 170 million U.S. dollars. The company expects that the order will be by the end of 2021. The previous delivery is completed, and the total number of mining machines is expected to exceed 100,000 by then, and the computing power will reach as much as three times the existing computing power; at the same time, the company’s main competitor, Riot Blockchain, will also start from Bit The mainland purchased 15,000 S-19 Antminers. The overweight purchase orders also pushed the share prices of the two mining companies to continue to rise after November 2020. As of the end of 2020, the share prices of the two companies have increased by 419% and 383% respectively in two months.
It is worth noting that while demand is rising, the production of mining machines does not seem to be sufficient. As early as November 2020, Bitmain’s official website has revealed that pre-orders of its flagship products Antminer S19Pro, S19 and T19 will not be delivered until May 2021. The current official website shows that the latest delivery time has been scheduled. Until August 2021.
In addition to the production capacity of mining machines, the more critical upstream chips are also in a tight supply balance, which also tests the pressure-bearing capacity of chip foundries, especially the current advanced process technology is concentrated in the hands of Samsung and TSMC, and in 2021 5G, consumption The demand for electronics continues to grow in the context of the epidemic, and many institutions believe that chips may be facing tight supply.
The so-called "mining" is to use a Bitcoin mining machine (essentially a computer) to perform a series of calculations, and the computing performance and power consumption of the mining machine are very important. The core component chip determines that the cost of the chip accounts for 70% to 80% of the total manufacturing cost of the mining machine. At present, the mining machine adopts ASIC chips, that is, integrated circuits designed for special purposes, and the manufacturing process has also entered the era of less than 10nm. For example, Bitmain’s Ant S19Pro model is equipped with TSMC’s 7nm custom chip, and the first 5nm ASIC chip has also been taped out. It is getting closer and closer to being applied to commercial mining machines; another manufacturer’s Bitmicro’s latest generation of whatsminma series The model uses Samsung's 8nm chip.
As early as the fourth quarter of 2020, major chip suppliers have increased their product prices, and major fabs are also operating at full capacity. The sharp increase in material costs and insufficient chip supply are the main reasons.
This can't help but think of the hot market for crypto assets in 2017. At that time, Bitcoin rushed to nearly 20,000 US dollars from more than 900 US dollars at the end of 2016, and the performance of the mining machine giants also exploded. In 2017, Bitmain, which accounted for approximately 70% of the global mining machine market, had revenues of US$2.517 billion, an increase of 8 times from US$278 million in 2016. In addition, Canaan Technology's revenue in 2017 was also as high as 1.308 billion yuan, a significant increase compared to nearly 300 million yuan in 2016. The chips used by these two mining machine giants are all produced by TSMC. From 2015 to 2017, the value of integrated circuits purchased by Canaan Technology from TSMC accounted for 75.7%, 66.2% and 63.5% of its total purchases, respectively. Bitmain ranked among TSMC’s top three customers in 2017.
At present, a similar picture seems to be reappearing, but many insiders have also begun to warn of risks. Bitcoin price fluctuations are one of the biggest risks. People in the currency circle generally told reporters that the Bitcoin bubble is already very large, and blindly entering the game or adding leverage may lead to liquidation. William, the chief researcher of OKEx Research, told the CBN reporter, “It is necessary to pour cold water on some investors in the current currency circle-for institutional investors, what they care about is profit, not'Bitcoin belief' or'blockchain.' The feelings of'revolution'. After the vaccine is on the market and the epidemic gradually eases, with the gradual recovery of the economy, monetary policy will gradually turn from loose to moderately tight. At that time, institutional investors are likely to dump Bitcoin. Of course, here. In the past, Bitcoin will still maintain the main trend of rising. As the price of Bitcoin gets higher and higher, market fluctuations will gradually increase. Investors are not recommended to add leverage."
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