Japanese GMO Internet Group records “extraordinary losses” in crypto-mining
With the bears ensconcing the virtual currency markets, miners are recording dismal losses and some even shutting-up-shop. Japan’s GMO Internet Group, the Bitcoin mining hardware giant has announced its departure from the virtual currency space in a public document released by the company on December 25.
The document was titled, “Recording Extraordinary Loss Related to The Cryptocurrency Mining Business Restructuring,” which highlighted the growing losses in the fourth quarter of 2018, which marks the apex of the bearish cycle.
GMO launched their in-house mining business back in December 2017 when the top-crypto Bitcoin [BTC] soared to nearly $20,000. The Japanese giant operates via wholly owned subsidiaries- two corporations headquartered in Switzerland, with a mining center.
This in-house mining division recorded significant losses during the “crypto winter,” of this year. The document read, “After taking into consideration changes in the current business environment, the Company expects that it is difficult to recover the carrying amounts of the in-house-mining-related business assets, and therefore, it has been decided to record an extraordinary loss.”
Return-on-investment on the mining business is decreasing as time goes on in the crypto mining business with electricity costs mounting. GMO plans on relocating to balance out the increasing mining costs, stating, “we will relocate the mining center to a region that will allow us to secure cleaner and less expensive power supply.”
GMO’s announcement is the latest in a slew of crypto-miners exiting the industry. Nvidia, the manufacturer of GPU was the worst performing company on the S&P500 in Q4 2018, due to the dropping crypto price. Another GPU manufacturer, AMD, saw its Radeon RX580 GPU drop by 67 percent in price.
Back in November, when the collective crypto-market cap dropped by over $100 billion, miners in China were selling their bitcoin-mining equipment by the kilo to salvage some money as their business was becoming more and more unprofitable.
Furthermore, Mao Shizing, the CEO of the cryptocurrency mining pool F2Pool published an infographic showing that if Bitcoin were to fall to under $5,300 (36,779 yuan), the Antminer T9 would be unprofitable. The aforementioned S7 model miner would just about break even if Bitcoin would rise up to $11,500 (79,805 yuan).
At press time, Bitcoin, which holds over 50 percent of the total cryptocurrency market cap has dropped under the $4,000 mark and is now priced at $3,880.
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