In the 19th-century California Gold Rush, who made the most money? While 99% of prospectors left empty-handed, the real winners were those selling shovels. In the Bitcoin ecosystem, mining hardware manufacturers and resellers play that same crucial role—supplying the tools for digital gold diggers.
When Bitcoin surged by over 1,300% in 2017, it sparked a global mining frenzy. Enthusiasts scrambled to upgrade from basic CPUs to specialized mining rigs. At the heart of this hardware boom stood Shenzhen’s Huaqiangbei—one of the world’s largest hubs for cryptocurrency mining equipment.
But markets shift fast. As Bitcoin prices plunged in early 2018, the once-lucrative mining industry faced uncertainty. To understand how these "shovel sellers" are faring amid market turbulence, we ventured into the bustling alleys of Huaqiangbei.
Mining Machines in High Demand
On a chilly January morning, Huaqiangbei came alive with traders, tourists, and tech seekers. Inside the fourth floor of SEG Plaza, Mr. Chen (a pseudonym), owner of a small mining equipment shop, carefully arranged display units of popular models like the Antminer S9 (Bitcoin), D3 (Dash), L3+ (Litecoin), and WhatsMiner M3.
“The Antminer S9 remains our bestseller,” Chen said. “Today’s price is 26,500 RMB with official power supply included. Prices change daily based on coin value and supply availability.”
The Antminer S9, produced by Bitmain, delivers a hashing power of 13.5 TH/s using 189 BM1387 chips built on TSMC’s 16nm FinFET process. According to Bitmain’s website, the bare unit cost was just 10,600 RMB in February—with an additional 650 RMB for the power supply. Despite a strict no-refund policy (“payment non-refundable regardless of shipment status”), units sold out instantly.
Yet retail prices in Huaqiangbei often doubled the official rate. Just a day earlier, the S9 was priced around 27,000 RMB. Why such a gap?
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“Only top-tier distributors get direct access from manufacturers,” explained salesperson Ah Hua. “If a major dealer buys 10,000 units at 10,800 RMB each, they resell to secondary dealers at 12,000 RMB. Each resale layer adds margin—by the time it reaches end buyers, prices hit 27,000 RMB.”
Most Huaqiangbei vendors act as intermediaries or scalpers, profiting from price spreads. This makes them highly vulnerable to volatility. The S9 once peaked at 33,000 RMB and dipped as low as 23,000 RMB—a 10,000 RMB swing that could mean profit or loss overnight.
“Our boss has been in this since 2013,” Ah Hua added. “We source closer to the top tier, so our margins are better and we’re less affected by price drops.”
The shop also traded secondhand machines. A stack of used S9s sat in the corner—acquired from miners cashing out. Within hours, after posting on social media (“10 used Antminers S9—like new, great deal!”), a courier arrived to ship them off.
The Human Side of the Mining Market
Buyers fall into four main categories:
- International buyers, especially Russians seeking cheap electricity
- Import/export traders fulfilling overseas orders
- Domestic mining farm operators
- Individual retail investors buying a few units for personal use
Chen speaks fluent Russian and regularly serves groups from Russia—now one of the largest markets for Chinese mining gear due to low energy costs and relatively permissive regulations. Reports suggest Russia may eventually control up to 30% of global crypto transactions.
Meanwhile, local entrepreneurs like Mr. Zhang—who normally sells network hardware—have jumped into mining arbitrage. “Do you have X10?” he asked Chen. Upon learning the price was around 56,000–57,000 RMB, Zhang noted he’d already secured four units at 55,700 RMB and offered to pool orders for better deals.
Not all buyers are seasoned pros. One factory owner from Hunan walked in demanding 500 S9s for his own mining operation—then asked, “Do you have any Bitcoin? Can I see what it looks like?”
For newcomers, return on investment is key. “Daily earnings vary,” Ah Hua explained. “Right now, an S9 earns roughly 100–200 RMB per day depending on Bitcoin’s price.” Operating costs include electricity and cooling fans—but experienced miners note that facility management and uptime are critical too.
“One power outage can wipe out a full day’s work,” one buyer warned. “You’re so close to generating coins… then boom—everything resets.”
Hidden Risks in the Hardware Trade
While many assume selling mining gear is foolproof, industry veteran Mr. Wang warns: “This business is deeper than you think.”
He recently received a shipment of what appeared to be brand-new S9s—only to discover they were refurbished units repackaged as new. “The box colors were slightly off,” Wang recalled. “Serial numbers didn’t register. These were machines used for over a month, flipped at nearly full price—a difference of thousands per unit.”
Even more alarming: two major upstream suppliers vanished without delivering ordered stock. “I paid upfront,” Wang said. “No contract—just verbal agreement. Now they’re gone. Police can’t help without evidence.”
This isn’t unprecedented. In 2015, similar scams exploited the industry norm of full prepayment without written contracts.
To cover their losses, middle-tier dealers began offloading refurbished machines. Wang’s own supplier passed on 2,000 such units—leaving retailers scrambling to unload them before prices dropped further.
By January 31st, many shops had closed temporarily. Some posted holiday notices; others simply ran out of stock. Futures for the S9 were available only for late February at 23,000 RMB.
Market Crash and Future Uncertainty
Bitcoin’s meteoric rise in 2017 created instant millionaires—but 2018 brought harsh corrections. By February, Bitcoin had lost nearly 70% of its peak value after crashing below $6,000—a 25% drop in just 24 hours.
Regulatory pressure intensified globally:
- U.S. banks banned credit card purchases of crypto
- The IRS increased scrutiny on taxation
- China announced stricter measures against offshore trading by domestic citizens
With Bitcoin tied closely to miner revenues, hardware values followed suit. The S9 dropped from ~26,500 RMB in late January to between 19,000 and 20,000 RMB by mid-February—a loss of over 6,000 RMB per unit.
“A vendor upstairs sold his entire inventory at 17,000 RMB fearing further declines,” Ah Hua said. “We bought 200 used S9s expecting small markups—but now we’ve lost over half a million RMB collectively.”
A fifth-floor vendor confirmed: “Our wholesale cost is 18,000 RMB. We used to make hundreds per unit; now it’s just 100—if that. Our February futures are locked at 23,000 RMB. If Bitcoin keeps falling, we’ll be operating at a loss.”
As night fell over Huaqiangbei, fewer lights glowed in the electronics mall. Many shops were shuttered for the Lunar New Year—but behind closed doors, transactions continued via WeChat.
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Yet anxiety lingered. No one knew what awaited them after the holidays—would prices rebound? Would regulations tighten further? Or would another wave of innovation revive the mining economy?
Frequently Asked Questions
Q: What factors influence mining machine prices?
A: Mining rig prices are closely tied to cryptocurrency values, electricity costs, production availability, and market speculation. When Bitcoin rises, demand increases—and so do prices.
Q: Is mining still profitable in 2025?
A: Profitability depends on current hash rates, energy expenses, and coin prices. While older models like the S9 struggle today, newer ASICs with higher efficiency may still yield returns under optimal conditions.
Q: How do miners protect themselves from fraud?
A: Always verify serial numbers, request purchase agreements—even if informal—and buy from trusted sources. Avoid full prepayments without guarantees.
Q: Why is Huaqiangbei so important in the mining industry?
A: As a global electronics hub with deep supply chains and rapid distribution networks, Huaqiangbei serves as both a retail and wholesale center for mining hardware worldwide.
Q: Can refurbished mining machines be trusted?
A: Refurbished units can work well if properly restored—but buyers should inspect firmware logs, test performance metrics, and confirm usage history.
Q: What role does regulation play in mining hardware sales?
A: While hardware itself isn’t banned in most regions, financial restrictions (e.g., payment bans) and tax enforcement indirectly affect buyer behavior and market liquidity.