Crazy Hard Drive: Price Plummets 2000 Yuan in 3 Days, Some Invested Over 3 Million and Got Trapped

This article is sourced from China News Service, authored by Chang Tao, and edited by Zhao Jiaran, with proofreading by Luo Kun.

The otaku never expected that hard drives would become a financial product.

"4200 yuan is already a rock-bottom price, please boss, sell me my goods quickly, I urgently need to recover funds." On the evening of April 21, Xiao Xin, a hard drive "flipper" from Changsha, Hunan, posted the above message in a QQ group.

Two days earlier, on April 19, seeing hard drive prices reaching new highs, Xiao Xin, who had a supply channel, hoarded 700 pieces of a certain brand's 16T hard drives at a price of 4550 yuan. But he never expected that he had bought in at the "midway," "now it's hard to sell a 16T hard drive for 4200 yuan, I might be stuck."

Chia is booming, hard drive prices have doubled

The surge in hard drive prices is mainly related to a cryptocurrency called Chia. According to reports, Chia was registered in August 2017 with the goal of developing a platform that optimizes blockchain and smart transactions.

An anonymous cryptocurrency insider explained that unlike most cryptocurrencies that use computing power for mining, Chia utilizes idle disk space on hard drives, and the earnings for Chia miners are proportional to the storage space. "The logic of hard drive mining can be simply understood as filling the hard drive with lottery numbers; the larger the hard drive, the more numbers stored, and the higher the probability of winning." the insider explained.

It is understood that hard drives can be classified in various ways, including by usage scenario, such as enterprise-level, consumer-level, and surveillance-level. By form, they can be divided into mechanical hard drives and solid-state drives. Hard drives used for mining generally refer to enterprise-level mechanical hard drives, with those having a storage capacity of 8T or more being the most suitable for mining.

Recently, reporters from China News Service found that with the popularity of Chia, the demand for hard drives has surged, leading to a significant increase in hard drive prices.

On e-commerce platforms, large-capacity mechanical hard drives from brands like Seagate and Western Digital with 6T and above are currently out of stock. Seagate's customer service on JD.com stated, "The large-capacity hard drives are basically sold out, and we are actively restocking; we have not yet received a specific arrival time."

▲ Some brand large-capacity hard drives are out of stock. Source: E-commerce platform

Some institutions with rigid demand for hard drives have also been affected. Wang Kai (pseudonym), who works at a design institute in Shanghai, told reporters from China News Service that his design institute has been "choked" by Chia hard drive mining.

"The design institute has some projects that need archiving, so we basically use 16T hard drives. The entire company has four to five thousand people, and the storage demand is very high. Now that the e-commerce channels are out of stock, we can temporarily use our reserve hard drives, but they will eventually run out, and we don't know how to solve it." Wang Kai said.

▲ Hard drive reference image

In offline channels and the scalper market, many are selling large-capacity mechanical hard drives at high prices. On April 19, reporters from China News Service visited an electronics market in Beijing and learned that after the explosive rise of Chia, the price of each enterprise-level mechanical hard drive has increased by about 600 to 3000 yuan depending on storage capacity.

"The price of Western Digital's 6T hard drive is 1450 yuan, 8T is 2900 yuan, and 16T is 6100 yuan. The price changes daily, so if you want it, make a decision quickly; it might be gone by the time you come back." a seller shouted. Before the price increase, the ordinary prices for 6T, 8T, and 16T enterprise-level hard drives were around 800 yuan, 1300 yuan, and 3300 yuan, respectively.

Prices experienced a roller coaster in three days Some invested over 3 million and got stuck

Why did the boom of Chia drive up hard drive prices? The aforementioned cryptocurrency insider believes that the number of hard drives purchased by individuals has a limited impact on the market; it is mainly due to some institutions buying in bulk, along with a group of "flippers" hoarding stock. "Many people invested millions, buying hundreds or thousands of hard drives at once," the insider said.

However, what these "flippers" did not expect was that hard drive prices took a roller coaster ride in a short time. On April 21, Xiao Xin recounted to reporters from China News Service his recent experience that left him feeling "exploded."

On April 19, the market price for 16T hard drives reached over 6300 yuan. Seeing the prices skyrocketing, Xiao Xin, who had a supply channel, couldn't sit still. "The usual price for a 16T hard drive is around 3500 yuan, and in just a few days it rose to over 6000 yuan. I was sure it would keep rising, so I hoarded 700 pieces at 4550 yuan, but unexpectedly, just two days later, I got stuck." Xiao Xin said.

On the evening of April 21, Xiao Xin posted a message in a solid-state drive trading group, "Brand new Western Digital 16T hard drive, priced at 4200 yuan, available for immediate pickup." Immediately, a group member replied, "Dude, are you losing or making money at this price?" Xiao Xin replied, "I'm in a pit, just hoping the boss will sell my goods quickly, I urgently need to recover funds."

Xiao Xin told reporters from China News Service that after the price of hard drives peaked on the 19th, it began to drop rapidly. "For example, the price of 16T hard drives was between 5500 and 6300 yuan on the 20th, and by the 21st, it was definitely below 4500 yuan." Xiao Xin said that he had sold over 200 of the 700 hard drives, with prices between 4500 and 5330 yuan. In the current market, even selling below the purchase price is not possible, and if prices do not rise in the future, it will be a total loss.

Another "flipper," Zhang Heng (pseudonym), also experienced the roller coaster of hard drive prices. A few days ago, Zhang Heng purchased about 200 pieces of 8T hard drives from various e-commerce platforms, which could sell for 2600 yuan each on the 18th, but now they are reported at 1950 yuan with no buyers.

With no business, Zhang Heng plans to continue lowering prices. "The price of hard drives was originally driven up by us flippers. Now I just want to sell them for whatever profit I can; who knows, the price might drop again tomorrow (22nd)." Zhang Heng said.

Why did hard drive prices drop so quickly? Zhang Heng indicated that it might be related to distributors releasing stock.

Gao Cheng (pseudonym) is the head of a component distributor in Fuzhou. He told reporters from China News Service, "The previous market was messed up by flippers. I started selling on the 20th, and the 8T Seagate enterprise-level hard drives came in at 1780 yuan, which had a huge impact on the 'flippers,' and the prices quickly dropped."

Gao Cheng revealed, "The previous high prices were largely due to agents hoarding stock, or there simply not being much stock in the channels, all of which were hoarded by 'flippers.' Now that the channels are starting to release stock, prices will naturally decrease."

▲ Reference image. Photo provided by the interviewee.

Sheng Zi (pseudonym) is a distributor for Dell, and he has been exceptionally busy these days. "Hard drives are on fire now; we are working overtime to dismantle hosts and take out the hard drives. Our 8T Seagate enterprise-level hard drives are only 1800 yuan, which is different from the flippers' stock; we are selling from our own inventory."

On the 22nd, hard drive prices continued to drop. On that day at noon, Sheng Zi quoted in a hard drive trading group, "8T Seagate enterprise-level hard drives are diving to 1650 yuan." Someone commented below, "Is there anyone quoting 1550?"