Crypto Farmers Rally Seagate and Western Digital Stocks

Increased demand for high-capacity hard drives for the mining of the new digital asset Chia have caused Seagate and Western Digital shares to soar over the past 3 trading days.

Chia, founded in 2017 by creator of BitTorrent Bram Cohen, is advertised as an eco-friendly cryptocurrency, and employs the use of hard drives in the creation and maintaining of its blockchain. 

Chia calls this process “farming” in reference to the reduced power draw their network consumes when compared to a mainstream cryptocurrency like Bitcoin.

In response, crypto miners in China have begun snapping up high capacity hard drives from Seagate and Western Digital, diminishing supply at a rapid rate. Tom’s Hardware reported Monday May 17 that some popular models of hard disks have been selling for up to $300 over MSRP.

Shares for both Seagate and Western Digital have skyrocketed in response to the news, as both companies will likely be ramping up production of hard disks to meet demand. 

Seagate has risen from $84 a share to $104 a share in just five trading days, and shares of Western Digital have gone from $66 to $76 in the same time frame.

In recent years, the switch to solid-state storage (SSD’s) has been driving down the production of traditional hard disk storage due to increased read and write performance from the former. 

Most producers of hard disk storage have been steadily ramping down their production over the past few years, which has inflamed the shortage further as supply begins to run dry.

Many tech experts expect that this will drive up hard disk storage prices similar to how crypto miners drove the price of graphics cards well above their suggested retail prices.

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