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What Can The Bitcoin Price Tell Us About The Mining Hardware Market?

How closely linked are bitcoin price and mining rig market? And what can this link tell us about current and future ASIC prices?

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How closely linked are bitcoin price and mining rig market? And what can this link tell us about current and future ASIC prices?

Bitcoin price fluctuations matter to miners more than they do to almost any other demographic of bitcoin investors because of the price’s effect on mining hardware markets. Regularly checking the price can often be counterproductive for long-term, diamond-handed HODLing, but the dollar value of bitcoin is important to any mining operation, especially for miners that are planning to acquire more hash rate.

A lower bitcoin price usually means slightly discounted prices on mining hardware for reasons explained in this article. With bitcoin still sitting nearly 40% off its latest all-time price high at the time of this writing, the prices for mining hardware have started to drop. This article explains the idiosyncrasies of the mining hardware market and its relationship to bitcoin, and it summarizes the mining market’s status quo amid a generally less frothy cryptocurrency market and the opportunities cheaper mining hardware could present.

Mining Hardware Market’s Relationship To The Bitcoin Price

Understanding how bitcoin’s price affects mining hardware prices isn’t complex. For one thing, since hash rate generally follows or lags behind bitcoin’s price movements, prices of ASICs — the source of hash rate — similarly lagging behind is not surprising. During downward price trends for bitcoin, the decision by some miners to unplug and even liquidate their hardware followed by the accumulation and deployment of new hardware during bullish periods tracks with (and somewhat intuitively explains) hash rate’s relationship to price.

In short, when the bitcoin price starts going up, sidelined miners are incentivized to plug in old machines and/or to buy new ones since the dollar value of the bitcoin they mine is higher. This price appreciation triggers higher demand for mining machines, which pushes hardware prices up, and eventually results in higher levels of network hash rate. When the bitcoin price starts going down, some miners become less profitable or altogether insolvent, which forces hardware liquidations, removes hash rate from the network and erodes some of the buyer demand for new machines that was present during the bullish period.

Mining hardware prices also tend to lag bitcoin because of their basic function as “money printers,” which makes their owners reluctant to hastily sell them. Between the operating costs, capital expenditures and overall bullish ideology required to start mining, this sector of the Bitcoin industry is by far the most heavily leveraged long out of any others. Thus, when the price goes up, miners are eager to buy more hash rate. And when the bitcoin price starts to dip, miners — even those with exceptionally thin profit margins — stop hashing and liquidate their hardware only when they have absolutely no alternative, which generally occurs sometime after bitcoin’s price has started to decline. In short, the internet money printers are valuable.

Observing the latest mining machine pricing trends compared to bitcoin’s price offers helpful insight into the relationship between the two data sets. The line chart below shows that even though price declines for bitcoin and mining machines have been roughly equal, the downward trends did not start at the same time.

The normalized weekly prices of bitcoin and mining machines indicate that, though they correlate, changes don't start at the same time.

Bitcoin’s first price peak was in April 2021, but machine prices didn’t follow its downward move until nearly a month later in mid-May 2021. Several months later, bitcoin peaked again in early November 2021, but machine prices didn’t start dropping mid-December 2021 and early January 2022.

The Current Mining Hardware Market

Like network hash rate and mining difficulty, the price of mining hardware also trends up or down with bitcoin. Thus, it’s not surprising that most pricing data from hardware resale markets show costs flattening or trending down. Later sections of this article explain this relationship, but for now, observe the latest pricing data visualized below.

Year to date, bitcoin’s price has dropped roughly 14% at the time of writing, according to data from Coin Metrics. Over the same period, mining machines have similarly dropped by 12% to -23% depending on what level of machine efficiency is accounted for, according to pricing data aggregated by Luxor Mining.

The following bar chart visualizes machine resale price changes compared to bitcoin’s price in 2022. The data is sorted by hardware efficiency measured in joules per terahash (J/TH). Note that the data presented are not exact prices, but aggregate prices collected from a variety of independently operated resale markets. Since the start of the year, downward price movements for all categories of mining machines have roughly matched bitcoin’s price drop. The mid-tier efficiency machines have experienced the largest markdown in prices, with this category including models like the Whatsminer M30s and the Antminer S17.

Visualizing the bitcoin mining machine resale market compared to the bitcoin price this year.

Seeing machine prices fluctuate by double-digit percentages since the start of the year isn’t a big surprise considering bitcoin’s characteristic volatility over the same period and the 20% to 40% machine price increases recorded in Q3 2021.

That volatility dissipated through. From Q4 2021 to date, mining machine prices experienced significantly smaller price changes. The line chart below visualizes weekly machine prices over the past 12 months for the top two tiers of machines sorted by efficiency — under 38 J/TH and 28 to 68 J/TH. Even though a downtrend since the holiday season is clear, machine prices are approaching the same levels they saw last year in March.

Bitcoin mining machine prices are approaching the same levels they saw in March 2021

What’s Next For Mining Machine Prices?

Have ASIC miner prices bottomed? And if not, when will they?

The answer is: it depends on bitcoin’s price. At the time of writing, bitcoin is still trading around $40,000, and where it goes from here is anyone’s guess. Cryptocurrency traders and investors have widely disparate predictions for the bitcoin market through the rest of 2022 thanks to a variety of instability catalysts, including record monetary inflation, European conflict and lingering coronavirus variants. But no matter where bitcoin’s price goes, mining machine prices will almost certainly follow.

Just like when bitcoin goes on sale — meaning the price drops — discounted mining machine prices also present opportune buying conditions for miners. Bullish market conditions are always kind to paper gains on machine values for miners. And by the same principle, bearish conditions offer nice gifts in the form of discounted machines for miners looking to add more hash rate.

This is a guest post by Zack Voell. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Government

Mathematicians use AI to identify emerging COVID-19 variants

Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants…

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Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants and could help with other infections in the future.

Credit: source: https://phil.cdc.gov/Details.aspx?pid=23312

Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants and could help with other infections in the future.

The framework combines dimension reduction techniques and a new explainable clustering algorithm called CLASSIX, developed by mathematicians at The University of Manchester. This enables the quick identification of groups of viral genomes that might present a risk in the future from huge volumes of data.

The study, presented this week in the journal PNAS, could support traditional methods of tracking viral evolution, such as phylogenetic analysis, which currently require extensive manual curation.

Roberto Cahuantzi, a researcher at The University of Manchester and first and corresponding author of the paper, said: “Since the emergence of COVID-19, we have seen multiple waves of new variants, heightened transmissibility, evasion of immune responses, and increased severity of illness.

“Scientists are now intensifying efforts to pinpoint these worrying new variants, such as alpha, delta and omicron, at the earliest stages of their emergence. If we can find a way to do this quickly and efficiently, it will enable us to be more proactive in our response, such as tailored vaccine development and may even enable us to eliminate the variants before they become established.”

Like many other RNA viruses, COVID-19 has a high mutation rate and short time between generations meaning it evolves extremely rapidly. This means identifying new strains that are likely to be problematic in the future requires considerable effort.

Currently, there are almost 16 million sequences available on the GISAID database (the Global Initiative on Sharing All Influenza Data), which provides access to genomic data of influenza viruses.

Mapping the evolution and history of all COVID-19 genomes from this data is currently done using extremely large amounts of computer and human time.

The described method allows automation of such tasks. The researchers processed 5.7 million high-coverage sequences in only one to two days on a standard modern laptop; this would not be possible for existing methods, putting identification of concerning pathogen strains in the hands of more researchers due to reduced resource needs.

Thomas House, Professor of Mathematical Sciences at The University of Manchester, said: “The unprecedented amount of genetic data generated during the pandemic demands improvements to our methods to analyse it thoroughly. The data is continuing to grow rapidly but without showing a benefit to curating this data, there is a risk that it will be removed or deleted.

“We know that human expert time is limited, so our approach should not replace the work of humans all together but work alongside them to enable the job to be done much quicker and free our experts for other vital developments.”

The proposed method works by breaking down genetic sequences of the COVID-19 virus into smaller “words” (called 3-mers) represented as numbers by counting them. Then, it groups similar sequences together based on their word patterns using machine learning techniques.

Stefan Güttel, Professor of Applied Mathematics at the University of Manchester, said: “The clustering algorithm CLASSIX we developed is much less computationally demanding than traditional methods and is fully explainable, meaning that it provides textual and visual explanations of the computed clusters.”

Roberto Cahuantzi added: “Our analysis serves as a proof of concept, demonstrating the potential use of machine learning methods as an alert tool for the early discovery of emerging major variants without relying on the need to generate phylogenies.

“Whilst phylogenetics remains the ‘gold standard’ for understanding the viral ancestry, these machine learning methods can accommodate several orders of magnitude more sequences than the current phylogenetic methods and at a low computational cost.”


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International

There will soon be one million seats on this popular Amtrak route

“More people are taking the train than ever before,” says Amtrak’s Executive Vice President.

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While the size of the United States makes it hard for it to compete with the inter-city train access available in places like Japan and many European countries, Amtrak trains are a very popular transportation option in certain pockets of the country — so much so that the country’s national railway company is expanding its Northeast Corridor by more than one million seats.

Related: This is what it's like to take a 19-hour train from New York to Chicago

Running from Boston all the way south to Washington, D.C., the route is one of the most popular as it passes through the most densely populated part of the country and serves as a commuter train for those who need to go between East Coast cities such as New York and Philadelphia for business.

Veronika Bondarenko captured this photo of New York’s Moynihan Train Hall. 

Veronika Bondarenko

Amtrak launches new routes, promises travelers ‘additional travel options’

Earlier this month, Amtrak announced that it was adding four additional Northeastern routes to its schedule — two more routes between New York’s Penn Station and Union Station in Washington, D.C. on the weekend, a new early-morning weekday route between New York and Philadelphia’s William H. Gray III 30th Street Station and a weekend route between Philadelphia and Boston’s South Station.

More Travel:

According to Amtrak, these additions will increase Northeast Corridor’s service by 20% on the weekdays and 10% on the weekends for a total of one million additional seats when counted by how many will ride the corridor over the year.

“More people are taking the train than ever before and we’re proud to offer our customers additional travel options when they ride with us on the Northeast Regional,” Amtrak Executive Vice President and Chief Commercial Officer Eliot Hamlisch said in a statement on the new routes. “The Northeast Regional gets you where you want to go comfortably, conveniently and sustainably as you breeze past traffic on I-95 for a more enjoyable travel experience.”

Here are some of the other Amtrak changes you can expect to see

Amtrak also said that, in the 2023 financial year, the Northeast Corridor had nearly 9.2 million riders — 8% more than it had pre-pandemic and a 29% increase from 2022. The higher demand, particularly during both off-peak hours and the time when many business travelers use to get to work, is pushing Amtrak to invest into this corridor in particular.

To reach more customers, Amtrak has also made several changes to both its routes and pricing system. In the fall of 2023, it introduced a type of new “Night Owl Fare” — if traveling during very late or very early hours, one can go between cities like New York and Philadelphia or Philadelphia and Washington. D.C. for $5 to $15.

As travel on the same routes during peak hours can reach as much as $300, this was a deliberate move to reach those who have the flexibility of time and might have otherwise preferred more affordable methods of transportation such as the bus. After seeing strong uptake, Amtrak added this type of fare to more Boston routes.

The largest distances, such as the ones between Boston and New York or New York and Washington, are available at the lowest rate for $20.

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International

The next pandemic? It’s already here for Earth’s wildlife

Bird flu is decimating species already threatened by climate change and habitat loss.

I am a conservation biologist who studies emerging infectious diseases. When people ask me what I think the next pandemic will be I often say that we are in the midst of one – it’s just afflicting a great many species more than ours.

I am referring to the highly pathogenic strain of avian influenza H5N1 (HPAI H5N1), otherwise known as bird flu, which has killed millions of birds and unknown numbers of mammals, particularly during the past three years.

This is the strain that emerged in domestic geese in China in 1997 and quickly jumped to humans in south-east Asia with a mortality rate of around 40-50%. My research group encountered the virus when it killed a mammal, an endangered Owston’s palm civet, in a captive breeding programme in Cuc Phuong National Park Vietnam in 2005.

How these animals caught bird flu was never confirmed. Their diet is mainly earthworms, so they had not been infected by eating diseased poultry like many captive tigers in the region.

This discovery prompted us to collate all confirmed reports of fatal infection with bird flu to assess just how broad a threat to wildlife this virus might pose.

This is how a newly discovered virus in Chinese poultry came to threaten so much of the world’s biodiversity.

H5N1 originated on a Chinese poultry farm in 1997. ChameleonsEye/Shutterstock

The first signs

Until December 2005, most confirmed infections had been found in a few zoos and rescue centres in Thailand and Cambodia. Our analysis in 2006 showed that nearly half (48%) of all the different groups of birds (known to taxonomists as “orders”) contained a species in which a fatal infection of bird flu had been reported. These 13 orders comprised 84% of all bird species.

We reasoned 20 years ago that the strains of H5N1 circulating were probably highly pathogenic to all bird orders. We also showed that the list of confirmed infected species included those that were globally threatened and that important habitats, such as Vietnam’s Mekong delta, lay close to reported poultry outbreaks.

Mammals known to be susceptible to bird flu during the early 2000s included primates, rodents, pigs and rabbits. Large carnivores such as Bengal tigers and clouded leopards were reported to have been killed, as well as domestic cats.

Our 2006 paper showed the ease with which this virus crossed species barriers and suggested it might one day produce a pandemic-scale threat to global biodiversity.

Unfortunately, our warnings were correct.

A roving sickness

Two decades on, bird flu is killing species from the high Arctic to mainland Antarctica.

In the past couple of years, bird flu has spread rapidly across Europe and infiltrated North and South America, killing millions of poultry and a variety of bird and mammal species. A recent paper found that 26 countries have reported at least 48 mammal species that have died from the virus since 2020, when the latest increase in reported infections started.

Not even the ocean is safe. Since 2020, 13 species of aquatic mammal have succumbed, including American sea lions, porpoises and dolphins, often dying in their thousands in South America. A wide range of scavenging and predatory mammals that live on land are now also confirmed to be susceptible, including mountain lions, lynx, brown, black and polar bears.

The UK alone has lost over 75% of its great skuas and seen a 25% decline in northern gannets. Recent declines in sandwich terns (35%) and common terns (42%) were also largely driven by the virus.

Scientists haven’t managed to completely sequence the virus in all affected species. Research and continuous surveillance could tell us how adaptable it ultimately becomes, and whether it can jump to even more species. We know it can already infect humans – one or more genetic mutations may make it more infectious.

At the crossroads

Between January 1 2003 and December 21 2023, 882 cases of human infection with the H5N1 virus were reported from 23 countries, of which 461 (52%) were fatal.

Of these fatal cases, more than half were in Vietnam, China, Cambodia and Laos. Poultry-to-human infections were first recorded in Cambodia in December 2003. Intermittent cases were reported until 2014, followed by a gap until 2023, yielding 41 deaths from 64 cases. The subtype of H5N1 virus responsible has been detected in poultry in Cambodia since 2014. In the early 2000s, the H5N1 virus circulating had a high human mortality rate, so it is worrying that we are now starting to see people dying after contact with poultry again.

It’s not just H5 subtypes of bird flu that concern humans. The H10N1 virus was originally isolated from wild birds in South Korea, but has also been reported in samples from China and Mongolia.

Recent research found that these particular virus subtypes may be able to jump to humans after they were found to be pathogenic in laboratory mice and ferrets. The first person who was confirmed to be infected with H10N5 died in China on January 27 2024, but this patient was also suffering from seasonal flu (H3N2). They had been exposed to live poultry which also tested positive for H10N5.

Species already threatened with extinction are among those which have died due to bird flu in the past three years. The first deaths from the virus in mainland Antarctica have just been confirmed in skuas, highlighting a looming threat to penguin colonies whose eggs and chicks skuas prey on. Humboldt penguins have already been killed by the virus in Chile.

A colony of king penguins.
Remote penguin colonies are already threatened by climate change. AndreAnita/Shutterstock

How can we stem this tsunami of H5N1 and other avian influenzas? Completely overhaul poultry production on a global scale. Make farms self-sufficient in rearing eggs and chicks instead of exporting them internationally. The trend towards megafarms containing over a million birds must be stopped in its tracks.

To prevent the worst outcomes for this virus, we must revisit its primary source: the incubator of intensive poultry farms.

Diana Bell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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