November 2018 has been the worst month in the history of cryptocurrency markets, and quite a few Bitcoin miners in China have become desperate to the point of selling their hardware rigs at rock bottom prices. On Black Friday, traders of digital currencies watched in dismay as the exchange price of Bitcoin fell below $4,260; meanwhile, operators of mining pools in China were aghast to learn that a major mining operation in the United States filed for bankruptcy.
On Weibo, a Chinese social media platform similar to Twitter, miners advertised their rigs to be weighed in kilograms and sold as scrap; meanwhile, a major mining pool in the U.S. Pacific Northwest, filed for insolvency in the Eastern District of Washington. The Giga Watt mining pool once held considerable promise as a cryptocurrency startup, but its main data center and offices are now under eviction proceedings.
Bitcoin mining is a complicated affair that requires significant capital expenses, cash flow, equipment expenses, and incredibly high electricity bills. Quite a few mining pools started doing business after incurring into significant debt; in the case of Giga Watt, creditors are owed more than $10 million, and the company reportedly has about $50,000 in the bank.
In China, strong demand for mining rigs was experienced when Bitcoin nearly reached $20,000 about a year ago; at that time, the entry-level price of a rig was about $3,000. Now that hardware used to mine Bitcoin is being liquidated in Taiwan, Hong Kong and mainland China, a powerful computer can be purchased for less than $150. Bitcoin mining rigs can be configured to function as high-end desktop computers perfect for PC gaming; in fact, manufacturers of graphics cards such as Nvidia and AMD could not keep up with demand at the height of the Bitcoin craze in late 2017.
As for traders and investors who ventured into the volatile cryptocurrency market, the current outlook ranges between grim and uncertain. Technical analysis experts believe that the Bitcoin downward spiral will continue until prices touch the dismal $3,000 mark, at which point the only hope will be a Santa Claus rally pushing the cryptocurrency back to $5,000 and beyond. Other digital currencies are also suffering during the ongoing bearish period; even the hopeful Ripple, a centralized token that cannot be mined but has achieved interesting circulation prospects, is currently priced around $0.42 down from a high near $0.65 three months ago.