Chinese Miner Dealers Star the ‘Dumping War’ for Self-defense
As Bitcoin and most of the other cryptocurrencies have dropped to a point where it’s hard for miners to make a profit through mining, a severe decline in demand occurs that accelerates cooling down of the mining machine market.
In Huaqiang North Commercial Area (HNCA), the world’s largest distribution center of cryptocurrency mining devices, the third to fifth floors are specially for mining machine sales. There used to be the most crowded market in HNCA when people were chasing for an advanced mining machine, but now, everything changes. There is nothing more frustrating to the mining machine retails to see the number of customers has dropped less than salesmen in store.
“At present, miners are dominating the retail market. Few people would like to hold mining devices without cheap electricity, no matter how cheap the machine is,” said Changming Ji, an ordinary retail in HNCA.
In this situation, a ‘dumping’ war starts gradually within the mining machine retail market.
Due to the current crypto market crash, stock up means taking a risk to retails.
“The market is just like trading sideways, there is no selling or buying, which is hard for people to make a profit from it,” said Ji.
Therefore, some retails chose to be the short-sellers in order to manipulate the market.
Using a common example, a mining machine dealer Mr.A received an order of Whats Miner M10 at a price of 5600 yuan which is far below market rates. The delivery time is 7 days after, but Mr. A has no M10 miners in his store at that time.
In order to get an extremely low price, Mr.A would spread rumors of selling Whats Miner M10 at 5500 yuan. In doing so, other dealers may force to cut down the price for preventing them from losing the market.
In the end, Mr. A may get the M10 miner at 5500 yuan and simply making a profit from the short selling.
In another case, short sellers may hold a large amount of certain type of miners, but rather than sell them directly, those dealers would prefer to use the price descending news for sales promotion.
After attracting customers to place large orders, they may raise the price due to the market shortage.
“This market is full of short-selling dealers, they can obtain a little profit by doing so, but it may hurt their peers’ interests and do harm to the mining machine retail market,” Ji said reluctantly.
However, some dealers are still standing their ground and they believe the market would be just like the Bitcoin price, although it has fallen to the bottom for several times, there is still a hope for skyrocketing.