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Bitcoin Miners – Fundstrat Global Advisors (Research snapshot)

Bitcoin Miners - Fundstrat Global Advisors (selected parts of research)

Mining hash power recently averaged over 75 EH/s, doubling from a bottom of ~35 EH/s in mid-December 2018. With the recovery in Bitcoin price over the same timeframe, legacy mining rigs such as the Antminer S9s are once again profitable despite overall network hash power growth. Thus, the mining industry is much healthier, and will likely find it easier to fund upgrades to the latest generation of rigs.

  • Our model suggests the cash cost of mining each BTC on the legacy Antminer S9 is now $7300 (assuming $0.06 / kWh), up from $3900 at the beginning of the year. Depreciation expense climbed to $1235 vs. $660 in January, reflecting a flat lower rig cost and a single S9’s lower share of increased hash power. Fully loaded breakeven is now $8528, compared with $4563 at the beginning of the year (slide 5).
  • Hash power doubled from the December low to 75 EH/s, which is the equivalent of 2.4 million incremental S9 rigs – although the mix is likely shifting to newer rigs.
  • Next generation mining rigs all have cash costs in the $2800-3300 range, with total breakeven between $5100-6300 (Slide 7). Bitmain’s Antminer S17 Pro is the least efficient of the new rigs, while Strong STU-U8 and Innosilicon’s T3+ 57T are the most efficient. Nonetheless, we believe the S17 will likely win a large market share owing to Bitmain’s scale and ability to procure sufficient wafers starts at its supplier, TSMC.


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