The great Chinese bitcoin mining diaspora of 2021 is in full effect and miners from Inner Mongolia to downtown Shanghai are under pressure to close up shop or else. Naturally that’s having some downward pressure on the prices of everything Bitcoin related from miner stocks to big name exchanges like Coinbase (COIN.Q) and to the price of the actual mining equipment.
Here’s Reza with the visuals:
That’s not so good for anyone who bought in on Coinbase’s IPO, but it’s great for companies like DMG Blockchain Solutions (DMGI.V), which picked up an additional 2,450 Bitcoin ASIC miners from Bitmain today.
This is expected to add an extra 245 Petahash per second to DMG’s mining capacity after they’re installed at the tail end of August, 2021.
“DMG is capitalizing on the declining mining equipment prices in Asia by spot purchasing new-generation bitcoin mining equipment at an approximately 60% lower price than just a month ago,” said DMG’s CEO, Sheldon Bennett.
When they’re completely installed and running, DMG estimates that the Antminer S19J Pro ASIC miners they bought have a nine month payback period, which is within their projected year return on investment for mining hardware. Also, they expect these miners will contribute to the company’s revenue and cashflow—otherwise, why buy them?
“While it was hard to resist purchasing Bitcoin miners over the past few months during their all-time high cost, DMG held strong knowing, from our past buying experiences, that, although the hardware market remains extremely active, it is important to secure the appropriate equipment at the right price to receive optimum value. We believe this purchase, along with other purchases that DMG is currently negotiating, will greatly improve our self-mining goals in the near term,” said Bennett.
If you’re unfamiliar, DMG is an environmentally friendly vertically integrated blockchain and cryptocurrency company involved primarily in mining Bitcoin, but also in making a little back-scratch off of selling excess electricity to our neighbour’s down south. Primarily, it’s the crypto, though.
They’ve separated their businesses into three different divisions—data centres, data analytics and forensics and developing enterprise blockchains. They primarily use hydroelectricity for their mining purposes, and collect block rewards and transaction fees by mining bitcoin as well as providing hosting services for other mining clients.
Their analytics division involves technical software products like Blockseer Pool, Mine Manager and Walletscore, as well as working with auditors, law firms and law enforcement.
- Blockseer’s new Bitcoin mining pool will be North America’s first bitcoin mining pool that will not only meet, but exceed the US Government’s Office of Foreign Assets Control (OFAC) compliance for BTC addresses, as well as providing the utmost level of transparency, auditability and corporate governance.
- Blockseer’s pool may further decentralize the bitcoin blockchain, readjusting the balance of hash rate to North America, where more Bitcoin nodes operate.
- Blockseer’s pool integrates DMG’s existing proprietary crypto forensics data, including Walletscore, to ensure that transaction blocks are OFAC compliant, as well as other risk factors that Walletscore tracks and manages
- Blockseer’s pool is integrated into DMG’s core technology platform, bringing all of DMG’s mine manager features into the pool, and providing an integrated User Experience for our customers.
Right now Bitcoin’s hovering around $32,788.72 having dumped 50% of its worth since its April 14th all-time high of $64,804.72 courtesy of China’s crackdown and herd mentality based on tweets by Elon Musk and other such high visibility talking heads. That means the 260 Bitcoins DMG are holding in reserve aren’t worth as much today as they were a few months ago, and neither is the 50 additional Bitcoins per months the new miners are expected to add. That’s likely to change when the miners scattered to the wind by China’s all-powerful regulatory fist find safe places to land.