2018’s bear market took its toll on not only cryptocurrency investors but Bitcoin (BTC) miners as well. Many BTC miners were forced to capitulate and sell their equipment by the kilos as mining became unsustainable when the price of Bitcoin continued to drop and they failed to make a profit.
However, according to the Chinese crypto news arm of 8btc.com, the Chinese Bitcoin mining industry may soon be turning around as they prepare for the next big bull run.
Bitcoin Miners Prepare for BTC Halving in May 2020
Per the report, miners in China have been stocking up on microchip Application-Specific Integrated Circuit (ASIC) chips in preparation for a bull run leading up to Bitcoin halving in May 2020. While the halving is still a ways away, miners want to be prepared and are willing to risk mining with low to zero profits in 2019.
As put by a veteran Bitcoin miner named Xu Feng:
“Don’t expect to make money this year, wait until bitcoin halving occurs next year.”
The next halving will see Bitcoin’s inflation reduced by 50%, and judging from past BTC halvings, Bitcoin is expected to rise in price in light of this. Currently, miners receive 12.5 bitcoins per block mined, which will drop to 6.25 bitcoins after the halving.
Despite Feng’s acknowledgment that mining may be unprofitable this year, he noted that his mining team was already ramping up their mining equipment, building their mining farms, and testing the farms to make sure everything is working efficiently for when the time comes.
How Are Chinese BTC Miners Preparing for the Next Bull Run?
Apart from buying new ASIC chips and building mining farm infrastructure, Chinese Bitcoin miners are also buying used equipment and making deals with hydroelectric plants and mining farms.
According to Xun Zheng, CEO of Bitcoin mining giant Hashage, Chinese miners are betting on an abundant amount of excess electricity to be generated this summer by hydroelectric plants due to a heavy rainy season.
Therefore, Bitcoin miners are expected to enjoy competitive electricity costs, making it a rare opportunity to earn profits if Bitcoin’s prices remain low in 2019. Zheng told Coindesk that even though electricity costs won’t be finalized until the end of March, Bitcoin miners are making deals with mining farms.
Moreover, Zheng said that over the past month, his company has been talking with individual miners and large mining farms that have a demand of over 1 million slots for deploying mining chips.
Therefore, it’s no question that the Chinese Bitcoin mining industry is gearing up for another bull run and are willing to invest in their infrastructure and planning before that happens.