It is not surprising that the new Chia cryptocurrency is causing such a stir, because with the current shortage of GPUs, the fact that there is a crypto that can be mined with the hard disk is something that will certainly attract the attention of miners who want to profit from it, and that still cannot be exchanged these coins (it is scheduled for May 3). For now, the hard drive shortage that it is causing only affects Asia, it is not global, but it is expected to be at some point if it continues to boom.
Chia already causes scarcity and price rise of hard drives in Asia
As we said, although the situation has not yet reached the point of global scarcity, new reports coming from Asia confirm that the prices of hard drives have already skyrocketed in values that exceed 60% in some cases, and in fact manufacturer Seagate has already confirmed in their financial earnings report for the quarter that they have seen a notable increase in demand that is related to the Chia mining.
Chinese media outlet Time Financia launched an investigation at an electronic mall located in Zhongguancun (known as the “Chinese Silicon Valley”) to interview some of the local hard drive distributors; Time Finance uncovered the dirty truth behind price increases: In addition to increased demand, a small circle of hoarders is cunningly storing hard drives to drive up prices.
According to this investigation, the hard drive distribution channel in China starts with the manufacturer, be it Western Digital or Seagate. Hard drives go through an agent and then a distributor before reaching the merchant, with several sources telling Time Finance that there is no shortage of hard drives, while others confirmed that manufacturers are simply not shipping orders. Another merchant claimed that Western Digital recently held a meeting where the company said it was not possible to ship orders to distributors at this time (but did not say why).
Apparently some of the best-informed sellers already anticipated the price increase a month ago. Dealers with a lot of money and direct access to agents took the opportunity to stock up when the price was still reasonable, while small sellers bought some units to sell, as they fear that the price will drop again eventually.
On the other hand, the really serious resellers went out of their way and bought thousands of hard drives to resell. A trader reportedly earned 3 million yuan (about 420,000 euros) in just one day from this price increase; However, these figures must be taken with a grain of salt because it is still not information that we can verify, everything is based on the investigation of a Chinese media (which is quite serious, everything is said).
The increase in the price of hard drives, will it affect us all?
|HDD||Increment of price||Actual Price||Price a week ago|
|HDDWestern Digital WD Gold 18TB||Increment of price40.4%||Actual Price$ 1,231||Price a week ago$ 877|
|HDDSeagate Exos X18 18TB||Increment of price66.7%||Actual Price$ 1,077||Price a week ago$ 646|
|HDDSeagate SkyHawk AI 18TB||Increment of price39.4%||Actual Price$ 923||Price a week ago$ 662|
|HDDSeagate Exos X16 16TB||Increment of price60.6%||Actual Price$ 816||Price a week ago$ 508|
|HDDSeagate IronWolf 16TB||Increment of price56.2%||Actual Price$ 814||Price a week ago$ 521|
|HDDUltrastar DC HC550 16TB||Increment of price30.3%||Actual Price$ 662||Price a week ago$ 508|
For occasional miners, Chia does not require the largest hard drives on the market and even a 4TB drive is sufficient. However, for potential investors, high-capacity models are the most sought after, especially business-class ones. In fact, many Seagate and WD hard drives that exceed 6TB are out of stock in the most famous online stores in Asia.
The Chia phenomenon is not limited to the Chinese market either. Hermitage Akihabara (Japan) reported that its country’s storage market is experiencing a similar situation; Bulk purchases have increased since last week and many stores are even imposing purchase restrictions to maintain stable inventory. However stocks of hard drives larger than 8 TB are also out of stock in Japan, and they claim that there are buyers who order 100 drives at a time.
Everything indicates, therefore, that even if the phenomenon of this new cryptocurrency called Chia for now is only in Asia, the shortage that the continent already suffers will affect manufacturers, who sell globally and therefore could potentially affect to the global hard drive market.