Q1 2020 Cryptocurrency Mining Industry Report

Executive Summary

  • Extremely volatile session: 2020 Q1 was an extremely volatile session for bitcoin, hashrate ranged at 100 EH/s, and briefly touched ~70 EH/s.
  • Older generation ASICs are phasing-out: Older generation ASICs’ profit margin such as Antminer S9s are being squeezed out by the newer generation miners, its profit margin maintained positively at roughly 35% before March, quickly turned into negative territory during the March market crash and recovered partially to an average of 20% during April 2020.
  • ASIC is dominating the market, Bitmain is still leading: As a specially customized chip to meet a specific demand, ASIC is far superior to FPGA and GPU in performance, volume, and power consumption. TokenInsight believes ASIC will keep grasping its overall share in the mining market.
  • Market volatility is expected: in the near future while the bitcoin network experiences a chaotic period in the short term to adjust itself back to an equilibrium state post-halving, and ultimately achieving a more efficient blockchain network.
  • Highest No. Of ASICs in Q1 in the past 3 years: Although the number of newly released mining machine models launched in Q1 2020 has decreased by nearly 60% from Q4 2019, it is the highest in numbers when compared with the first quarter in the past three years.
  • Structured financial products: At present, the majority of players who have adopted structured financial products are institutional players. TokenInsight believes that these structured financial products are difficult to understand, thus they may face some resistance in terms of the adoptions in the market.
  • COVID-19 has a negative impact: on mining farms globally, mining farms from the west are leveraging various strategies to lower the cost of production, and selling bitcoin at a favorable price.
  • Filecoin mainnet delayed once again: uncertainty surges. The future Filecoin market direction depends on the broader market conditions, the actual result for the mainnet launch, and the overall confidence in the mining community post-launch.
  • Handshake ASIC mining: Affected by the delivery of Handshake ASIC mining machine Mars H1 in Q2 2020, the income of GPU miners will continue to shrink, and phasing-out after ASICs fully enter to the Handshake network in Q2 2020.

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