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Bitmain Losing Dominance In The Crypto-Mining Equipment Market

Chinese crypto-mining giant Bitmain has managed to obtain the status of a legend within the market over the past few years. However, that seems to be old news now as the firm slowly falls out of favour.

According to a research from analysts at Sanford C. Bernstein and Co., Bitmain is losing its technological stronghold over the industry, and while it still holds almost 85% of the market for crypto-mining devices, firms like Ebang International and Canaan Inc. are definitely gaining ground over it.

Bitmain mostly profits from the sale of its mining devices. Its other, smaller income sources include the mining of tokens themselves, the management fee revenue collected from its mining pools, and the cloud services rental fees for providing mining power.

But if Bernstein’s claims in their report are to be believed, it would provide some insight into Bitmain’s late radical moves. Controversy hit the firm in March when it sold $12,000 worth of XMR (Monero) mining devices despite being perfectly aware that they would become obsolete by the time of shipping.

Bitmain is also deeply invested into the crypto-project EOS, crypto-payments firm Circle, internet browser Opera, and even integrated crypto-exchange DEx.top. CEO Jigan Wu explained that for more than the next 5 years, almost 40% of the firm’s profits could come from the sale of AI chips instead of mining devices.

Bitmain’s moves towards such diversity in a small period is definitely surprising. The firm’s recent IPO announcement has also brought up questions regarding its financial position.

The firm expects to rake in about $18 billion through the well-anticipated IPO, and it has certainly caught the interest of investors. Earlier reports have said that Tencent and SoftBank Group had participated in the firm’s pre-IPO round, which definitely brings questions regarding their aim of $18 billion for the main IPO.

The financial standing of the firm was further brought into question when the documents from Bitmain’s pre-IPO investments showed that it was holding a major part of its assets in BTC Cash, the controversial fork of Bitcoin.

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