Bitmain Lowers Prices for Bitcoin Mining Antminer S19 Chain

Key facts:
  • Marathon will be the company that will get the most benefits, buying the 73,000 S19 XP.

  • Bitmain’s price adjustment is also affecting the flea market for these devices.

Bitcoin miners have learned to take exceptional measures in extreme cases. This was confirmed by Bitmain, a major manufacturer of mining equipment, which has lowered the prices of the S19 series Antminers for its major customers.

According to the Hashrate Index released today, Bitmain Resets Pricing for Antminer S19 Series Bitcoin Mining Rigs. The main reason for this decision is due to the crisis that the sector is going through as a result of the bear market.

As part of the presales agreement for equipment manufactured by Bitmain, Bitcoin miners who have placed orders for Antminer S19 XP, S19 J and other models in the chain can apply for Price Protection Credit. This will allow miners to take a deduction from the advance purchase they made between November and December 2021, with an adjustment calculated approximately 15 days before the final payment.

This means that Miners will be able to pay the balance of the purchase based on the adjusted price of equipment between July and August of this year.

In addition, they can take advantage of other items, which include Possibility to add other machines to the order to make up the difference in cost (Depending on the stock available in Bitmain) or partially or completely cancel the order. In the latter case, the buyer will not have the possibility to request a refund, but will receive a credit for the remaining balance in Bitmain products.

Effects of Price Cuts on the Secondary Market for Bitcoin Miners

Bitmain’s price cut will have repercussions on the second-hand market for bitcoin mining equipment, a statistic from the Hashrate Index shows.

As can be seen, the downward trend in the price of bitcoin mining equipment continues, as we mentioned on CriptoNoticias. The average price for the S19 XP model in July was just $7,962.

Average Antminer S9 XP ASIC Price
S19 XP prices are down about 30% in July compared to the previous month. Source: Hashrate Index.

How much do bitcoin miners save with this price cut?

According to the regulatory document of the US Securities and Exchange Commission (SEC) considering Bitmain sell orders, the main beneficiary of this price adjustment is Marathon Digital. This company has scheduled orders for 73,000 miners of the S19 XP, to be delivered between July and December 2022.

Marathon placed orders at $83/TH ($11,620) in July last year. On Handover (Q4 2022) The value of this equipment will drop to USD at an average of 50 USD/TH. This method of expressing sale value allows the numbers to be simplified, based on the processing power of the Antminer S19 series miners.

Between July and August, the Marathon will welcome 13,000 teams each month. If the firm chooses the price adjustment option, They will save $110 million in purchasing S19 XP mining hardware.

Riot Purchase Order to Bitmain
Bitmain’s public purchase order document shows the price adjustment value of the S19 XP Bitcoin miner purchased by Marathon. Source: Regulatory Document of the Saudi Electricity Company / Retail Index.

The remainder of the Marathon order is expected to be priced similarly to these. The adjustment will be calculated every month based on the current market price.

For its part, Riot Blockchain has previously purchased 18,000 S19 J Pro devices. According to the original contract, these devices were priced at $65/TH. In fact, the company has already received 1,500 machines per month at this price.

If Riot requests a price adjustment for Bitmain, the order for July and August of this year will be $37/TH. This will translate into a savings of 4.5 million on your August application..

Price adjustment option for Riot on Bitmain
Riot can save up to $8.6 million by using Bitmain’s price adjustment option. Source: Regulatory Document of the Saudi Electricity Company / Retail Index.

According to the document outlining Bitmain’s sales orders in the US, Riot has also placed orders for the Antminer S19 XP model. Between July and August of this year, 6000 workers of these will be delivered. In the process, the company can save 25.45 million US dollars.

Riot's purchase order for Bitmain, under the supervision of the SEC
The Securities and Exchange Commission (SEC) regulatory document outlines the purchase order and delivery schedule for the S19 Pros that Riot purchased from Bitmain. Source: The regulatory document of the Saudi Electricity Company.

Another company that could benefit from Bitmain’s price adjustment is Bitfarms. According to a press release, the company pre-purchased 1,200 bitcoin miners in December of last year.

With the prices estimated in the document, Bitfarms could save $1.68 million in two months. In its post, Hashrate points out that it makes sense for an order of this size, for this company to take in more units rather than ask for a price adjustment.

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