High demand for Bitcoin mining causes collapse due to lack of production chips for mining rigs

High demand for Bitcoin mining causes collapse due to lack of production chips for mining rigs
Manufacturers of cryptocurrency mining machines report a shortage of chips, resulting in suspended production.
Golden bitcoin and computer chip

The ongoing bull run in the crypto markets caused, in addition to price increases, an unprecedented collapse for mining machinery manufacturers.

This situation was explained by Reuters, which received several statements from various industry leaders.

The first to confirm this situation was Alex Ao, vice president of Innosilicon, and chip designer and major provider of mining equipment, who said:

There are not enough chips to support the production of mining rigs,

This phenomenon is here on such a scale for the first time, but it is a classic reaction to the market, which was very aptly named by Gordon Chen, co-founder of cryptocurrency asset manager and miner GMR:

When gold prices jump, you need more shovels. When milk prices rise, you want more cows.

For the third time, Reuters also managed to get a statement from Lei Tong, managing director of financial services at Babel Finance, which lends to miners:

almost all major miners are scouring the market for rigs, and they are willing to pay high prices for second-hand machines.

According to Lei Tong, North America is behind the largest purchases, which should even have overtaken China. Many mining companies even have to place orders with delivery times from August to September 2021.

As for the prices of crypto mining rigs, they should have increased by an average of 50% over the last year for used sets, the prices of new machines have doubled.

Recall also a recent announcement from the executive vice president and chief financial officer of NVIDIA, which stated that if the demand for the crypto market still increases, the company will start considering the production of specialized graphics cards intended only for the crypto mining.

Read also: The number of Bitcoin whales is growing rapidly in 2021

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