Miner Goes Bankrupt, Manufacturers Stuck With Inventory, Rigs ‘Sold By Kilo’ as Scrap
American Mining Operation Goes BankruptGiga Watt, a bitcoin miner based in the U.S. state of Washington, filed for bankruptcy on Monday. The company told the Eastern District of Washington bankruptcy court that it is “insolvent and unable to pay its debts when due,” according to local media reports. The company claimed to have less than $50,000 in assets left and somewhere between $10 million to $50 million in outstanding liabilities. As news.Bitcoin.com previously reported, Giga Watt is the product of Dave Carlson, who has past experience with failed mining ventures. In 2014, his Megabigpower mining project fell apart after his supposed partners failed to purchase the equipment they had promised to buy. Giga Watt was also sued for securities fraud by investors who claimed to have contributed around $20 million to its ICO in the summer of 2017.
Taiwanese Manufacturers Stuck With InventoryWeak demand from GPU miners is one of the leading contributing factors to the slump in sales for manufacturers of motherboards and graphic cards such as Asus and Gigabyte, according to reports from Taiwan. The companies also expect the situation to continue to negatively affect their bottom lines through the first half of 2019. “Gigabyte’s annual motherboard shipments for 2018 are estimated to fall under 12 million units from 12.6 million posted in 2017, and its graphics card shipments for 2018 are forecast to drop to the 2016 level of 3.65 million units, down one million units from 2017,” industry sources told Digitimes. While the bear market is definitely bad for miners, hardware manufacturers and their shareholders, it could potentially benefit PC gamers. As vendors are reportedly stuck with an excess inventory of cards in the face of falling demand from miners, they might eventually have to dump them on the gaming market at lower prices.
Old Mining Rigs Are Sold for Scrap in ChinaGiven the fierce competition in the mining sector, as well as the emergence of stronger new machines and the wear and tear of continual usage, it is no wonder that mining rigs lose their value over time. However, with cryptocurrency prices now falling, reports of rigs being sold on the cheap are spreading like wildfire. Financial media outlets in China, for example, reported on Tuesday that some small and medium-sized operations in the country’s Xinjiang and Inner Mongolia regions have been reluctant to resell their mining machines, as average prices for secondhand rigs have fallen from about 20,000 yuan ($2,880) a year ago to just 1,000 CNY ($145) at present. This tense situation has also given rise to viral photos of rigs being dumped or sold as scrap metal in China, which many commentators have unsurprisingly dismissed as mere FUD. According to one local report, the phrase “miners sold by kilo” was the top trending term on Chinese search engine Baidu at one point recently.
When will the cryptocurrency mining market bounce back? Share your thoughts in the comments section below.
BRUTAL: this is what’s happening now in a China based mining site …. pic.twitter.com/gcN4lVTyBt— Dovey Wan (@DoveyWan) November 20, 2018
Images courtesy of Shutterstock.
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