Bitcoin’s recent bull run has juiced demand for new mining equipment, putting pressure on manufacturers to produce enough machines to meet demand.
The world’s largest cryptocurrency by market cap is currently trading at above $11,000 after it surpassed the $10,000 level over the weekend – a nearly 200 percent jump since February.
“The surge in bitcoin resulted in increased demand and supplies were already short,” said Steven Mosher, head of global sales and marketing at Canaan Creative, maker of the Avalon miner.
While he declined to disclose the firm’s order volume, Mosher said in an email that “the current state of the industry is that inventories are down and demand is high.” He told CoinDesk:
“It looks like a return to the 2017 Q3, Q4 conditions, where demand was three times the supply.”
Back then, bitcoin’s price had doubled from July to September in 2017 and further jumped by four times in the last quarter, reaching almost $20,000.
The price increase over the past several months also led to a significant drop of the time it takes for new mining equipment to pay for itself, according to data provided by TokenInsight, a crypto startup that focuses on mining and trading research.
The firm estimates the average payback period for most mining equipment in the second quarter has dropped to 60 to 150 days, a notable decrease from the previous range of 120 to 280 days.
To capture the new opportunities, Canaan launched a new mining model last month, the AvalonMiner 1041, which it claims can compute as much as 37 tera hashes per second (TH/s) with electricity consumption at 2,361 watts per hour.