Bitmain announces ‘partial refund’ for Antminer customers

Getting your Trinity Audio player ready...

Hardware manufacturer Bitmain has announced a partial refund for some buyers of its Antminer S17+ and T17+ devices, ranging up to $272 per unit in some cases, reflecting the changing outlook for the block reward mining sector.

The move is a response to the fall in digital currency prices in March, as well as recognition of the decline in BTC block rewards ahead of the halving event about to take place in May—the net result of which is less revenue for mining operators.

The discounts come amid price markdowns at the firm, and will apply to devices with delivery dates set between February and April. The refunded amounts will be paid in coupons, with customers receiving or expecting delivery in April in line for the maximum $272 refund.

The Chinese company said the coupons could be redeemed for purchases from Bitmain, in line with the increasingly challenging market conditions for hardware manufacturers. According to analysts, the move comes at a time when Bitmain is expected to oversee declining profitability as well as increasing liabilities.

The recent crash in BTC prices, fueled by the coronavirus crisis, has already weighed on hardware prices, with companies forced to slash costs for new equipment. Coinciding with the upcoming halving of rewards, firms like Bitmain are expected to increasingly struggle to operate profitably.

The problems for Bitmain are compounded by its delivery cycle, which operates on a pre-order basis for delivery two to three months after ordering. As a result, customers who ordered devices for delivery in April are likely to have paid inflated prices based on market conditions at the time of purchase in January, despite prices now being significantly lower.

Prices for hardware have been slashed across the board in the past month, with double-digit percentage reductions becoming normal across the sector. Antminer S17+ units have dropped from $1,567 to $1,320 over the period, a 15.7% decrease in retail price.

With the profitability set to continue to decline after BTC’s upcoming halving, the refunds underline the problems currently facing manufacturers in the sector. The news is likely to be welcomed by those with substantial orders in progress, as well as those who have accepted delivery of new hardware in recent weeks but it won’t be enough to stop the blood bath that is coming to these operations after the BTC halving.