It seems that the largest producer of ASICs, the Chinese company Bitmain, has found its way out of the financial crisis. It plans to launch 200,000 cryptocurrency mining devices. For this, contracts are already concluded with local farmers.
Just a few days ago, it was reported that Bitmain is closing its Norwegian representation. Experts attribute this to an increase in the price of electricity in the region. Now the office will be transferred to Germany, and some employees will be dismissed.
Bitmain Technologies Ltd was founded in 2013 with the goal of developing cryptocurrency mining equipment. Now it holds a dominant market share, and is the owner of the two largest pools of mining BTC.com and Antpool.
Earlier, the company curtailed the activities of several of its offices in various regions of the world. Bitmain controls more than 80% of the mining equipment market, and a huge amount of unsold balances has appeared in its warehouses.
Most recently, they presented the 7NM chip, but its new brainchild, the Antminer Z11, uses the previous chip model based on 12 NM technology. Although it has increased performance, this solution looks strange. It seems that the company simply can not realize the available stocks.
According to unofficial data, 2018 turned out to be unprofitable for Bitmain Technologies Ltd. It even had to “burn” 12% of all extracted bitcoins to maintain the level of demand. However, this cannot go on forever. And Bitmain had its own plan for overcoming the crisis. The company plans to place 200,000 cryptocurrency mining devices from Chinese farmers.
Traditionally, in summer, the demand for electricity in China falls, which leads to a fall in prices. Bitmain plans to use this feature by installing equipment from third parties.
It is expected that each of the devices will bring from 1.29 to 3.38 dollars per day. Given the retail value of ASICs, the operation does not seem to be so profitable. Depending on the model, their price ranges from $ 600 to $ 1000. However, no one knows what the cost of equipment. Therefore, it is possible that for Bitmain it is more profitable to use it for mining than to expect buyers.
However, far from all manufacturers of ASICs, the situation adds up in such an uneasy way. Another Chinese manufacturer, Canaan Creative, was able to find additional funding and achieve a capitalization level of $ 1 billion.
This suggests that investors believe in the rapid rise in the price of cryptocurrency. The situation on the stock exchanges indicates the appearance of an uptrend. Of course, no one expects 2017 growth rates. Therefore, it is time for more subtle solutions. And it seems that Bitmain has found its way out of the crisis.