Bitmain Falling Behind in Crypto Mining as Competitors Catch Up
August 23, 2018 12:43 pm
Bitmain, the cryptocurrency mining giant from China has been the market leader when it comes to selling equipment and mining cryptocurrencies. There is no denying that it is the most profitable cryptocurrency business in the world.
However, things are seemingly slowing down. As per a report published by Sanford C. Bernstein & Co., a research investment firm says that Bitmain is losing its market advantage for the production of mining chips. Currently, the company controls at least 85 percent of the crypto mining equipment market. Companies like Ebang International Holdings Inc. and Canaan Inc. are catching up.
Bitmain was stuck in a controversy back in March 2018, when they shipped Monero (XRM) and other privacy-based coin mining equipment knowing beforehand that the product would become obsolete by the time it shipped. This equipment was priced at $12,000.
Since last year, it seems that Bitmain is focusing on diversifying its product portfolio. In fact, the company announced the development of a cryptocurrency mining farm in Texas this month. The company plans to spend $500 million on this project.
Bitmain has also diversified its investments in various companies. The company invested in EOS, the blockchain platform, Circle – a crypto payment company and Opera browser. The company also started a decentralized exchange called DEx.top.
According to Jihan Wu, CEO, Bitmain, it is estimated that 40 percent of the company’s revenue could come from selling AI chips in the next five years.
Bitmain recently launched its Initial Public Offering (IPO) which is expected to raise about $18 billion. According to online reports, the Softbank Group and Tencent were participants in the pre-IPO. However, the companies later denied their involvement in the IPO, which raises concerns over the expected amount of $18 billion.
It is believed that Bitmain’s diversification of its business is due to the fact that the company is rapidly losing its monopoly over the cryptocurrency mining market.