Chinese Bitcoin Miners Panicked by Currency Values Near Thanksgiving

Around the time American families sat down to enjoy Thanksgiving dinner, Bitcoin mining groups in China went into panic mode as the cryptocurrency market suffered precipitous losses. Reports from Chinese websites that follow digital currencies trends indicated that Bitcoin mining firms were dumping their expensive hardware rigs as the world's most valuable cryptocurrency reached levels below the $4,500 mark. The impetus to quickly sell off mining rigs prompted at least one mining pool to offer their hardware by the kilo instead of by the unit. A hint of desperation was felt on Weibo, a Chinese social media platform similar to Twitter, where traders and miners speculated that Bitcoin still had more room to fall below $2,000 by the end of the year. One of the problems with Bitcoin mining is that it can be an expensive activity. The exchange prices seen on Thanksgiving no longer merit the costs of mining for Bitcoin. Earlier this year, a major mining pool in China estimated that once Bitcoin fell below the $5,300 level, mining would no longer be profitable; in fact, high volumes of sell orders have been handled by the largest digital currency exchanges since this estimate was published. Depreciation of mining hardware in China is causing sellers to offer their rigs for as low as $150; these are computers that sold for as much as $2,880 just a year ago when Bitcoin was trading around $20,000. Quite a few mining pools went into debt to finance their hardware acquisition costs as well as to cover other expenses such as space rental, bandwidth and electricity. At the height of the Bitcoin mining craze in late 2017, video game enthusiasts complained that they could not purchase high-end graphics cards because miners quickly bought all of available stock. The current fire sale of mining rigs will probably encourage other miners to grab equipment at bargain prices, particularly those who are hopeful that the market will rebound. A recent approval of a cryptocurrency exchange-traded fund in Switzerland failed to motivate investors, and the potential approval of similar ETF products in the United States has been postponed until after the New Year.