Just a few weeks ago, the crypto market was optimistic about the impending approval of a Bitcoin ETF. Unfortunately, after the Securities and Exchange Commission rejected the Winklevoss’ Bitcoin ETF application and announced that they are postponing their decision on Bitcoin ETFs, Bitcoin plunged close to $6,000 coming from $8,500 at one point.
However, this doesn’t stop miners from operating. In fact, Beijing-based mining equipment company Bitmain was able to hit its quarterly revenue target of approximately $2 billion. The company is currently on track on its $10 billion annual revenue target.
Fortune reported that the company made $1.1 billion in profit during the same time last year. This growth is quite exceptional considering that Bitcoin is currently sliding even towards $6,000. Last year, Bitmain’s revenue was at $2.5 billion. And in 2016, the company simply made around $300 million.
Because of the company’s potential, Bitmain was able to acquire investors. One of their investors is Sequoia China. Bitmain has been able to come up with $300 to $400 million from its investors.
Huge Market for Crypto Mining
The crypto industry is still growing. In fact, Nvidia, which is a company that makes computer chips were able to generate $9.7 billion during its 2017 calendar year. And between February to April of this year, Nvidia was able to generate $3.21 billion.
And because of the potential of this market, Bitmain filed for an initial public offering. It has a potential of raising $18 billion this September at a market cap of around $40 to $50 billion. If Bitmain is going to successfully pull off its plan, this means that Bitmain is going to replace Facebook as one of the largest public offerings in history.
Crypto Mining Issues
There are a great number of issues surrounding cryptocurrency mining. In fact, there are regulators such as those from China that are looking to shut down crypto mining operations. The main reason is its energy-intensive nature.
Most of the mining farms in China are found usually in Sichuan province. This province gets its energy from hydroelectric stations. And the Chinese governments have already threatened to close down the stations in order to protect the environment. This move could halt 60% of mining farms in the province. Unfortunately, this comes with a price. This also means that it is going to lose around 15 thousand jobs.
Xinjiang is another place where many crypto miners are concentrated. The government of Xinjiang announced that it is going to strengthen the management of digital currency trading including having rules that pertain to mining. And though nothing is final yet, there are already a good number of miners worried about their future.
And because of this, the crypto miners decided to find other places where they can operate. Quebec has become popular for a number of reasons. You have cold weather, not to mention Quebec is quite welcoming towards crypto miners despite implementing a higher price for them on electricity.
Do you think Bitmain will keep on getting bigger despite the losses that Bitcoin incurred? Will the reward for solving math equations even be worth it for miners in the coming months?