A global chip shortage is choking the production of machines used to “mine” bitcoin, a sector dominated by China, sending prices of the computer equipment soaring as a surge in the cryptocurrency drives demand.
The scramble is pricing out smaller miners and accelerating an industry consolidation that could see deep-pocketed players, many outside China, profit from the bitcoin bull run, according to Reuters.
Bitcoin mining is closely watched by traders and users of the world’s largest cryptocurrency, as the amount of bitcoin they make and sell into the market affects its supply and price .
Trading around $32,000 today, bitcoin is down 20pc from the record highs it struck two weeks ago but still up some 700pc from its March low of $3,850.
“There are not enough chips to support the production of mining rigs,” according to Alex Ao, vice president of Innosilicon, a chip designer and major provider of mining equipment.
Read more about the global chip shortage here.