Bitcoin Mining Hardware Market Expected to Reach $1.7 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Bitcoin Mining Hardware Market," The bitcoin mining hardware market was valued at $528.91 million in 2021, and is estimated to reach $1.7 billion by 2031, growing at a CAGR of 12.6% from 2022 to 2031.

Bitcoin mining is the process by which new bitcoins enter into circulation. It is also the way the network confirms new transactions and is a critical component of the blockchain ledger's maintenance and development. "Mining" is performed using sophisticated hardware that solves an extremely complex computational math problem. Moreover, bitcoin mining is a mechanism by which new bitcoins are generate and validate new transactions. It entails the use of huge, decentralized networks of computers all over the world to verify and safeguard blockchain, which are virtual ledgers that record bitcoin transactions. In addition, computers in the network are rewarded with new coins in exchange for contributing their processing power. Furthermore, it is a virtuous circle where miners secure and maintain the blockchain. In return, the blockchain rewards coins, and the coins provide an incentive for the miners to maintain the blockchain.

Furthermore, major market players have undertaken various strategies to increase the competition and offer enhanced services to their customers. For instance, In October 2022, Grayscale the world’s largest cryptocurrency asset manager has announced a new investment product providing exposure to Bitcoin mining hardware. The fund will raise money for buying Bitcoin ASIC machines, which will be operated by Foundry Digital to mine and sell Bitcoin on behalf of investors. Therefore, these factors boost the growth of the bitcoin mining hardware market.

Moreover, the Bitcoin mining hardware market has seen a shift in recent years towards application-specific integrated circuits (ASICs), which are specifically designed for the purpose of mining Bitcoin. These devices have largely replaced the use of general-purpose GPUs for mining. In addition, there has been a trend towards the development of ever-more efficient and powerful ASICs, as well as the centralization of mining power in large mining farms. 

Furthermore, there has been a trend towards the centralization of mining power, as larger mining operations are able to acquire more advanced hardware and economies of scale. Another trend in the Bitcoin mining hardware market is the increasing use of renewable energy sources to power mining operations. This is driven by the high energy consumption of mining rigs and the desire to reduce environmental impact. Some miners are using hydroelectric, solar, and wind power to power their mining operations. Another trend is the increased adoption of cloud mining, which allows individuals and organizations to rent mining hardware and pay for mining power on a per-hashrate basis. This allows individuals who may not have the resources to purchase and operate their own mining rigs to participate in the mining process. Also, the decline of mining profitability and the increase in mining difficulty is pushing some miners out of the market, as it becomes increasingly difficult to recoup the cost of mining hardware and energy expenses. This has led to a decrease in the number of miners, and an increase in the concentration of mining power among a smaller number of larger mining operations.

Finally, the trend of mining in countries with low electricity costs and/or friendly regulations is becoming more and more popular. With the increasing difficulty of mining, miners are trying to maximize their chances of profitability by moving to countries with cheap electricity and favorable regulations. This is leading to the migration of mining operations to countries like China, Russia and Canada.

On the basis of type, the application-specific integrated circuit (ASIC) is the highest growing segment. This is attributed to the fact that an application-specific integrated circuit (ASIC) is a kind of integrated circuit that is specially built for a specific application or purpose. Compared to a programmable logic device or a standard logic integrated circuit, an ASIC can improve speed because it is specifically designed to do one thing and it does this one thing well. It can also be made smaller and use less electricity. These factors drive the growth of the market.

By region, North America attained the highest growth in 2021. This is attributed to the fact that demand for bitcoin mining hardware has increased as a result of the release of COVID-19, which has significantly accelerated the growth of the bitcoin currency. Moreover, the increasing demand for bitcoin in the commercial sector in North America is one of the prime factors driving the growth of the bitcoin mining hardware market. In addition, the US and Canada contribute significantly to the mining hardware market in this region, owing to government initiatives to legally adopt and monitor cryptocurrency systems across their commercial sectors. These are the key bitcoin mining hardware market trends in North America.

The COVID-19 outbreak had a positive impact on the growth of the bitcoin mining hardware industry, as the adoption of bitcoin has increased in the face of unprecedented circumstances. In addition, COVID-19 pandemic has significantly fueled the growth rate of the bitcoin mining hardware market, owing to the significant rise in adoption of bitcoins by banks and financial institutions has been observed, owing to increase in need to share financial details with consumers during the COVID-19 outbreak. Additionally, banks and fintech industries were showing more interest in bitcoins currency for enhancing their business processes and providing secure contactless payments to speed up their payment transaction process, which leads to more demand for bitcoin mining hardware market. Therefore, the COVID-19 moderately impacted the bitcoin mining hardware market growth.

Key Findings of the Study

• By security, the two-factor authentication segment led the bitcoin mining hardware market size in terms of revenue in 2021.
• By application, the enterprise segment accounted for the highest bitcoin mining hardware market share in 2021.
• By region, North America generated the highest revenue in 2021.

The key players profiled in the bitcoin mining hardware market analysis are BetterHash, BIOSTAR Group, Bitcoin Merch, BITMAIN Technologies Holding Company, Coindesk, CoinWarz, Compass Mining, Inc., Nicehash, StormGain, Zipmex.  These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.