Unlike other cryptocurrencies, Chia cultivation is not done by loading the GPU (or CPU) with complicated calculations, but instead uses the capacity and performance of storage devices to obtain the cryptocurrencies. This has led, especially in the Asian market, to a high demand for high-capacity hard drives and high-performance SSDs (and especially high durability) that quickly led to shortages and higher prices. Fortunately, it seems that this situation has not lasted long, the stock has already recovered and prices have started to decline.
The price of SSDs, down again
The recent sharp drop in the price of SSDs is related to the price collapse of the cryptocurrency mine; the price of these has fallen considerably in recent weeks, and recently the news broke that large mining farms in China had been shut down because professional miners seemed to have lost interest, causing without going any further an 8% drop in the Ethereum mining power. Chia has not been spared from this drop, and as a consequence it seems that many miners have decided to stop “farming” this cryptocurrency.
Not long ago, hard drive manufacturers viewed Chia mining as an unprecedented opportunity, so they set to work to maximize their production capacity with the goal of selling as many devices as possible. This, coupled with the decline in interest in mining, has caused the stores’ stock to be quickly replenished, causing the price to return to normal as well.
In the screenshot above you can see a graph of the price of the WD SN550 SSDs, one of the most used for Chia mining and which until recently was quite scarce. The prices are in Yuan but they help us to see the trend, because at the end of May they were almost 1,300 yuan and now their price is around 600, so it is clear that the price has been reduced by half to return to its price original and even lower than it was before Chia’s rise.
Will there be overstock?
Now we must prepare for the opposite situation: the rise of the cryptocurrency caused most manufacturers to strive to maximize their production capacity to replenish stock in stores as soon as possible, and since interest seems to have plummeted now, it is quite likely that we will see each other. in the opposite situation to the shortage: the over stock.
An over-stock situation would lead to an even more pronounced drop in prices, as suppliers will want to empty their shelves of products to be able to refill them with new ones, while manufacturers will have to cut their production capacity again so that the situation do not get worse.
Do you remember the famous hard drive crisis caused by the floods in Thailand a few years ago? At that time they already strengthened their production capacity and now they have shown that they can cope with a high demand like the one that has been because of Chia quickly, but of course, this also has some bad consequences for them, good for the users. because surely we can find SSD at a much lower price than until now.