GMO gets out of crypto mining

25 Dec, 2018
by Arthur Sillers
News
GMO gets out of crypto mining

Japanese firm GMO Internet, according to a publicly released document, is getting out of the crypto mining business completely.

GMO will ‘stop the development, manufacture, and sales of mining machines’ due to ‘extraordinary losses’ of about $320 million in 2018’s Q4. While the document contends that the losses will not endanger GMO’s ‘financial integrity,’ GMO’s suspension of all mining rig sales as well as its plan to ‘relocate the mining center to a region that will allow us to secure cleaner and less expensive power supply’ represents a massive restructuring.

The news also represents a huge change from the company’s impressive Q3 performance, and the change reflects the huge hit which the crypto market took in the last quarter of 2018. Bitmain, which has a comparable business model to GMO’s mining efforts, is rumored to be laying off as much as half of their staff, citing in part the depreciating return that crypto mining offers.

Read more: Yen overtakes dollar for buying crypto

Crypto is actually booming in Japan, with the Japanese yen overtaking the dollar in terms of Bitcoin trading, but mining globally is clearly taking a huge hit in terms of rewards and profitability. As GMO’s document states, ‘the profitability of the in-house mining business of GMO Internet Group decreased as the cryptocurrency price declined and our mining share did not increase as expected due to the rise of the global hash rate.’ As mining becomes increasingly competitive and crypto becomes less and less valuable, mining companies and those who supply mining hardware are likely in for a serious squeeze.

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