Bitmain focuses on manufacturing business because of loss in retailing. The first half of 2018 bought more fame for the Bitcoin mining industry as its head started with huge revenues, outstanding all of 2017. However, Diar’s research shows many Bitcoin mining firms are facing a net loss for the first time in September 2018. This is due to increased hashing rate meant mining in paying retail electricity prices.
The industry’s valuation came down to $217 billion from $800 billion earlier. Cryptocurrencies went down 50% by there actual value compared to the beginning of 2018 because of an extended bear market.
Until the third quarter of this year, miners have earned over $4.7 billion. Chinese entities made more profit because of their dominant hashing rate network. Bitcoin is traded at an average of $36,000 and its price remains 40% higher than last year.
Bitcoin mining is still profitable for companies, which are getting cheap electricity and are in cold climatic region. Computing power has been increased for maintaining the Bitcoin network, due to these smaller mining firms and corporations which are paying retail electricity prices are facing net losses.
MINING FIRMS IN CHINA
Bitmain focuses on manufacturing business because of loss in retailing. China has more disinclination towards cryptocurrencies but still, it remains as one of the best economies to set up a mining firm even for retail business. The wholesale price of electricity in China costing $0.04 kW/h is benefiting the mining business, for retailers, it is approximately double. But fixed costs for property rent, equipment, salaries, and other overhead costs are pulling mining business towards loss zone.
Bitmain, Beijing-based mining firm is shifting its focus on manufacturing business. Bitmain’s IPO is worth-ed for a whopping $3 billion on the Hong Kong stock exchange. AntPool and BTC.com are owned by Bitmain and these are two among the World’s largest mining pools, and these dominate the Bitcoin hash power with 42% share. Rising costs and low profits of Bitmain indicate to their IPO investors for critical need of strong investments on hardware
BITMAIN’S NETWORK SHARE
The Bitmain can make mining profitable for the retailers with its dominant share in the Bitcoin network, it can shift the operations between its Chinese and US units with controlling its hashing power all the times. Bitmain runs 11 mining firms in China alone which accounts for 6% of Bitcoin’s hashing power. And it announced for three upcoming firms in the US.
Currently, mining has become rich men game and unprofitable to retail investors. Market growth is not predictable but the industry will survive until it reaps profit for the big corporations.