By Josiah Wilmoth
Chinese Bitcoin mining firm Bitmain quietly made an estimated $4 billion last year, ranking it among the most profitable firms in the burgeoning cryptocurrency industry.
Chinese Bitcoin Mining Firm Bitmain Made an Estimated $4 Billion Last Year
Many newcomers to the cryptoasset space fantasize about striking it rich by setting up a homebrew Bitcoin mining operation. However, most enthusiasts find that mining proves to be more of a hobby than a true revenue-generator.
However, one firm has turned Bitcoin mining into a near-science — the Beijing-based Bitmain.
Bitmain, which was founded in 2013, is best known for developing cryptocurrency miners that use application-specific integrated circuit (ASIC) chips to maximize efficiency, but the firm has its hand in several branches of the industry’s supply chain (highlighted in gray) and mitigates the risks associated with Bitcoin’s price fluctuations by renting out hashpower to individual users on so-called “cloud mining” platforms.
Bitmain keeps its financial data close to the vest, but estimates rank it favorably to venerable tech manufacturers that have been industry stalwarts for decades. Citing research from Bernstein’s semiconductor analysis team, CNBC reports that Bitmain made $3 billion to $4 billion in operating profit during 2017 — a figure the firm describes as a conservative estimate.
This, Bernstein notes, makes Bitmain equally as or more profitable than chipmaker Nvidia — another company that has profited from the cryptocurrency boom — which made an estimated $3 billion in 2017.
“But Bitmain achieved this in merely four years, while it took Nvidia 24 years to get here,” the Bernstein analysts said in a report published Wednesday.
Moreover, this profit level dwarfs that of Silicon Valley darling Coinbase, a cryptocurrency brokerage firm that reportedly garnered about $1 billion in revenue during fiscal year 2017.
Later in its report, Bernstein estimated that Bitmain’s rapid growth will continue into 2018, potentially making it one of the top five customers of Taiwan Semiconductor Manufacturing Company (TSMC), one of the world’s largest semiconductor foundries, with a total consumption comparable to those of Qualcomm and AMD.
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Featured Image from Source: Qilai Shen/Bloomberg