Cryptocurrency companies have started a massive sale of token mining equipment

Mining companies have started a massive sale of cryptocurrency mining rigs, hoping to at least partially cover losses from the fall of the digital asset market, as the cost of cryptocurrency mining equipment has fallen by 75%.

According to the Luxor Technology mining pool, in 2021, equipment with a capacity of 100 TH/s was sold for an average of $ 106. Currently, the price of a rig is about $ 24. The shares of the largest mining company Core Scientific (CORZ) have fallen by 99% since the beginning of 2022, the capitalization of TeraWulf (WULF) has decreased by 93% over the same period, Stronghold Digital Mining (SDIG) — by 94%, and Riot Blockchain (RIOT) — by 74%.

During the period of rising cryptocurrency prices, mining companies were actively purchasing machines and renting premises for them, often on credit. However, since the beginning of 2022, digital asset prices have fallen, causing a decrease in interest in the mining industry, which has led to large losses for companies.

The ex-miners of the Ethereum cryptocurrency, which switched to the green blockchain, were particularly affected. From now on, they mine altcoins and move to cloud computing so that expensive equipment does not stand idle. Chris Kiley, head of marketing at the Flexpool mining pool, said that several dozen graphics cards will heat real estate in Vancouver: «Now that it’s colder, I’m going to turn them back on… the graphics cards generate heat from the load, so it makes sense to just run the GPU rather than turn on the devices that heat the house.»

As the Financial Times found out, about 20% of ethereum miners do not intend to give up cryptocurrency mining. They have switched to such altcoins as Ethereum Classic (ETC), Ravencoin (RVN), and Ergo (ERG). However, it is still unclear how profitable it is to mine altcoins or provide cloud services compared to ETH mining. Others are waiting for the market to grow so that altcoin prices justify the costs of mining.