Miner Weekly: Bitmain Expands Self-Mining While Raising Rig Prices

Bitmain's strategy of selling S21s while mining with S19XPs

This article first appeared in Miner Weekly, BlocksBridge Consulting’s weekly newsletter curating the latest news in bitcoin mining and data analysis from TheMinerMag. Subscribe to receive in your inbox once a week.

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As reported last week, the prices for Bitmain’s latest generation of mining rigs have trended up based on data observed from Chinese and U.S. ASIC trading desks.

Contracts from at least one public mining company – three months apart – now show Bitmain has indeed raised rig prices, though not to the extent of the increase in bitcoin’s hashprice.

CleanSpark announced this week its second preorder for 12 EH/s of Bitmain’s Antminer S21 at $16/TH/s after applying coupons. Based on its contract entered on Jan. 6, the quoted price before a maximal 30% discount was $23/TH/s.

CleanSpark entered its first S21 preorder three months ago on Oct. 6, indicating that Bitmain quoted a pre-coupon price of $20/TH/s. After using coupons to offset 30% of the price, CleanSpark effectively signed up for $14/TH/s. Either way, there was a 15% increase over three months.

Also interesting is that the January contract no longer allows the buyer to delay 20% of the payments due for each batch until a year after shipment. But it granted CleanSpark an option to buy another 20 EH/s for a fixed price of $16/TH/s within this year as a hedge against possible future price increases.

While raising rig prices, Bitmain has substantially expanded its proprietary mining fleet in the U.S.

The bankruptcy court presiding over Core Scientific’s Chapter 11 reorganization approved the company’s motion to buy 27k S19j XPs totaling 4.1 EH/s from Bitmain and provide hosting for an additional 27k S19j XPs for the miner manufacturing giant.

Screenshot 2024 01 11 at 2.28.09 PM
Source: Core Scientific Chapter 11 Court filings

At a hosting fee of $0.0745/kWh, the colocation of 27k S19j XPs for Bitmain will bring Core Scientific a hosting revenue of about $14 million per quarter. For perspective, Core’s total revenue from hosting services was ~$30 million in Q3 last year.

According to Core, Bitmain has been a hosting client for nearly five years and the latest colocation agreement continues supporting Bitmain’s bitcoin mining operations in North America.

Here’s an interesting perspective. Bitcoin’s average hashrate in December 2023 reached an all-time high of 507 EH/s and increased by nearly 250 EH/s compared to the 2022 high of 262 EH/s in October. According to data from TheMinerMag, Bitmain alone imported about 52 EH/s into its U.S. subsidiary in 2023 – almost exclusively the S19XP series – and it continued importing more since the new year.

Regulation News

  • Greenville City Council unanimously agrees to have city staff look at the future of ordinance allowing cryptocurrency mining – WITN

Hardware and Infrastructure News

  • Bitcoin Miner Phoenix Buys $187 Million Worth of Antminers – TheMinerMag
  • CleanSpark Buys 12 EH/s of S21 Bitcoin Miners for $193 Million – TheMinerMag
  • Hut 8 Receives Court Approval for Power Plants Acquisition – Link

Corporate News

  • Bitfarms Appoints Tracy Krumme as Senior Vice President, Head of Investor Relations – Link
  • Court Grants Core Scientific Motion to Host 4.1 EH/s for Bitmain – TheMinerMag

Financial News

  • Core Scientific Raised $55 million in the Equity Rights Offering – Link
  • Riot Executives Shoot for $200 Million in Restricted Stock Rewards – TheMinerMag


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