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Hard Drive Prices Skyrocket In Asia Due to New Chia Cryptocoin, Scalpers Capitalize

Forget GPUs, hard drives are the new gold

A report from China last week found that cryptocurrency miners were buying hard drives and SSDs to grow Chia, a cryptocurrency that is not scheduled to start trading until May 3. Although the situation has not reached the point of a global shortage, new reports from two other Asian publications have confirmed that hard drive prices have skyrocketed in some regions, and hard drive manufacturer Seagate has confirmed in its quarterly financial gains that it sees an increase in demand related to cryptocurrency mining.

Chinese news agency Time Finance launched an investigation in an electronic shopping mall located in Zhongguancun (nicknamed “Chinese Silicon Valley”), Beijing, to interview some local hard drive retailers. Time Finance has uncovered the dirty truth behind price increases: in addition to rising demand, a small circle of collectors is shrewdly storing hard drives to raise prices.

According to Time Finance research, China’s hard drive distribution channel starts with the manufacturer, whether Western Digital or Seagate. Hard drives go through an agent, then a distributor, before finally reaching the dealer. Several sources told Time Finance that there is no shortage of hard drives. However, one of the sources told the publication that agents from Seagate and Western Digital are simply not submitting orders. Another trader said that Western Digital recently held a meeting at which the company allegedly said that it was not possible to ship orders to resellers at the time and that it needed to recall many products.

Apparently, some of the well-informed sellers were aware of the price increase a month ago. Merchants with deep pockets and direct access to agents obviously took the opportunity to stock when the price was most reasonable. Small money changers bought some units to sell, as they fear the price will end up falling. On the other hand, really serious retailers bet and bought thousands of hard drives to resell. A trader reportedly made 3 million yuan (~ $ 461,900) in a single day when prices rose. Take the number with a little salt, as it is not information that we can verify. Time Finance noted that money changers were also offering their overpriced products in WeChat groups.

Hard Drive Pricing In China

Hard Drive Price Increase Current Price Lowest Price (1 week ago)
Western Digital WD Gold 18TB 40.4% $1,231 $877
Seagate Exos X18 18TB 66.7% $1,077 $646
Seagate SkyHawk AI 18TB 39.4% $923 $662
Seagate Exos X16 16TB 60.6% $816 $508
Seagate IronWolf 16TB 56.2% $814 $521
Ultrastar DC HC550 16TB 30.3% $662 $508

Hard DrivePrice IncreaseCurrent PriceLowest Price (1 week ago)
Western Digital WD Gold 18TB40.4%$1,231$877
Seagate Exos X18 18TB66.7%$1,077$646
Seagate SkyHawk AI 18TB39.4%$923$662
Seagate Exos X16 16TB60.6%$816$508
Seagate IronWolf 16TB56.2%$814$521
Ultrastar DC HC550 16TB30.3%$662$508

*Data from manmanbuy.com

For casual farmers, Chia does not require the largest hard drives on the market; even 4 TB hard drives will be sufficient. For potential investors, however, high-capacity drives are the most sought after models, especially enterprise-class hard drives. In fact, many Seagate and Western Digital hard drives over the capacity of 6 TB are all sold out on JD.com and Taobao, two of China’s largest online retailers.

We randomly compare some 18 TB and 16 TB hard drives using data from manmanbuy.com, which is a popular price tracker for JD.com and Taobao. Compared to last week’s lowest price, 18 TB and 16 TB hard drives increased by up to 66.7% and 60.6%, respectively. Vendors are also switching from surveillance and NAS models, such as Seagate’s SkyHawk and IronWolf lines.

When cryptocurrency creators buy all corporate hard drives, they can turn to surveillance models. Surveillance hard drives are certainly not as reliable as corporate ones, but they must still prove to be more durable than conventional hard drives. And when they run out, consumer hard drives will have nowhere to hide.

The Chia phenomenon is also not limited to the Chinese market. Hermitage Akihabara reported that Japan’s storage market is experiencing a similar situation. Bulk purchases have increased since last week, and many stores are applying new purchasing restrictions to maintain stable inventory. However, a store told the Japanese news agency that the stock of hard drives larger than 8 TB is depleted and buyers are ordering 100 units at a time.

Chia is not yet available for transactions, so the real value of a single Chia currency (XCH) is still uncertain. It is a high-risk, high-reward investment for the first users who are pouring rivers of money into building an infrastructure for Chia.

Although the price of the hard drive is at an all-time high in China or Japan, there is no need to panic when shopping, because the lack of stock is isolated in specific regions of Asia. In addition, shipping rates have increased and hard drives are not the lightest computer component to ship. Even if a manufacturer has tons of inventory, shipping products quickly across the globe is challenging and certainly not cheap, limiting the impact on the global supply of hard drives. At least for a while.

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