As ASIC Prices Shrunk in 2022, the Antminer S19 XP's Price Premium Grew

2022 put pressure on every aspect of the Bitcoin mining market, and few aspects of the mining market felt this pressure more than the ASIC trade. And as prices fell across the board for ASICs of all calibers, the Antminer S19 XP – along with other next-gen hardware – saw its price premiums to new, mid, and old-gen hardware rise.

In 2021, New-gen (S19, M30 series) and mid-gen rigs (S17, M20 series) hit all-time high values amid the market mania. In 2022, the bear market drove these rig tiers to all-time lows. New-gen rigs fell 85% from $101.04/TH to $14.88/TH, mid-gen rigs fell 87% from $76.10/TH to $9.92/TH, and old-gen rigs fell 82% from $26.53/TH to $4.72/TH.

This article is an adapted excerpt from our 2022 year-end report, which you can download below.

S19 XP commands a sizable premium to other hardware

As hashprice receded throughout 2022, miners increasingly looked for ways to improve their operational efficiency. One of the easiest ways to do this? Buy the leatest generation hardware.

When futures orders first cropped up for the S19 XP in November and December of last year, Bitmain discounted the machine compared to spot and even other new-gen futures orders because the first shipments didn’t hit until July/August of this year. As we discussed in our Q3 report, this discount flipped into a premium at the beginning of the year.

As the year progressed and mining margins continued to dwindle, the S19 XP premium grew progressively larger throughout the year. Pure-play Bitcoin mining companies are pressured to buy XPs if they have higher operating costs, despite their lower expected investment return. This phenomenon has led to a significant divergence in projected investment return for new generation machines and highlights the advantage of lower-cost miners.

Curiously, the premium for MicroBT’s M50 was much less pronounced, most likely because the model’s hashrate, which ranges from 114-120 TH/s, and its efficiency (29 J/TH) is not substantial enough to merit the hefty premium the S19 XP commanded. We do not have any comprehensive data on the M50S because there aren’t enough of these models circulating in the secondary market, and the M50S+ hasn’t shipped yet.

The S19 XP’s premium to other rigs only increased as the year went on. Notably, the degree of this premium to new-gen (25-38 J/TH) rigs increased significantly in November after hashprice hit its all-time low, indicating that miners are increasingly eager to purchase the S19 XP over new-gen rigs.This is not a surprise: just as prices for the S19j Pro and other new-gen hardware quickly grew into a premium to the S17 / mid-gen rigs and the S9 / old-gen rigs, so too is the S19 XP experiencing a premium

This premium also means that in the case of a strong uptick in mining economics, the XPs will have a smaller beta (correlation) to hashprice than mid-gen and old-gen machines. This is in line with historical trends where demand for new generation machines suppresses price volatility.

Beyond the Antminer S19 XP, new rigs cropped up in 2022

In addition to Bitmain, MicroBT and other ASIC manufacturers rolled out next generation hardware in 2022, and not a moment too soon – these new machines will be key for certain miners to survive the bear market.

The much anticipated S19 XP, Bitmain’s newest workhorse, first hit racks in July 2022. MicroBT announced the M50 and M50S, the flagships of its forthcoming M50 series, in April. In November, MicroBT also announced the M50S+, a machine powerful and efficient enough to compete with the S19 XP.

These next-gen rigs were at first only available to miners dealing in size enough to order bulk quantities for future delivery. Now, they are trading spot on the secondary market and have become increasingly available to small, mid, and large scale miners alike (the one exception is the M50S+, which was released in November and has not been shipped en masse yet).

2022 was also the year that semiconductor stalwart Intel entered the Bitcoin mining ASIC manufacturing game. ePIC Blockchain, Block, Argo, and Griid were the first to purchase shipments of these chips. Unlike Bitmain and MicroBT, Intel is only manufacturing the chips themselves, not the entire, plug-and-hash rig.

As such, the companies ordering these chips will be tasked with building the rigs themselves. Hive, for instance, deployed 1,423 so-called “HIVE BuzzMiners” that make use of the chips in December, 2022 (regrettably, they did not publish efficiency and performance stats for the miners, so they likely do not outcompete hardware from Bitmain and MicroBT). Hive’s BuzzMiners appear to be air-cooled, but we miners will use Intel’s ASICs for immersion setups as well.