Japanese IT giant GMO Internet has recently revealed it is laving the Bitcoin mining hardware sector after it endured a huge loss this year, over the cryptocurrency ecosystem’s year-long bear market.
Through a regulatory filing, according to Finance Magnates, the IT giant revealed that as the price of cryptocurrencies drops, the profitability of its crypto mining chips drops as well. The filing reads:
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.
The company’s move comes little over a year after it decided to enter the sector, and a shortly after it revealed its 7nm Bitcoin miner, which it claimed would be an influential machine in the industry over its high hashing power and low electricity consumption. A key reason behind its move, the report states, is declining user interest.
The ‘extraordinary loss’ it refers to is of 35.5 billion Japanese Yen (JPY), equivalent to about $318 million. These losses, it adds, will see GMO Internet no longer “develop, manufacture, and sell mining machines.” Despite the move, it’s still set to continue its in-house mining operation, although it’ll relocate it to a mining center where it’ll pay less for energy.
GMO’s mining business has seen it lose over $5.5 million in the third quarter of this year, and $3.5 million in the second quarter. As CryptoGlobe covered the ASIC producer is now down over $8.7 million since the first quarter of 2018.
The IT giant also has its own cryptocurrency exchange called GMO Coin, which as covered decided to only list BCH and not Bitcoin Cash Satoshi’s Vision (BSV). The company is set to launch its own yen-backed stablecoin next year, and launched its BTC mining operation in September of last year.
Notably this year’s bear market has seen various cryptocurrency miners shut down their operations, and as such it’s notable GMO is still running its machines. As covered, Bitcoin’s hashrate plummeted as miners kept struggling to stay afloat. This, according to some, reduces the network’s security.