GMO bids farewell to mining hardware
We have previously reported on GMO Internet’s cryptocurrency business:
Whereas the pivot in August, at the end of GMO’s second fiscal quarter was substantial, in that the business priorities had changed from “mining first” to “mining hardware sales first”, only four months later the company is throwing in the towel and discontinuing hardware production completely. The business had commenced only in September 2017, and is recording an extraordinary loss of approximately USD 220m now.
In addition, the company recognizes that the investment in mining hardware for its own mining operation (which switched from in-house hardware to third-party vendors during the mid-year pivot) is no longer recoverable, incurring an impairment loss of approximately USD 100m. The company might continue mining at locations with cheaper electricity, but has not made a final decision regarding the destination yet. Given that the bulk of mining cost goes towards electricity and hardware depreciation, with the latter having been completely written off, GMO should still be able to extract some yield from the mining equipment on hand.
As far as the overall bitcoin mining market is concerned, peak hash power has been reached again at the beginning of November, and has seen a steep decline since then, from about 52,000 PH/s to about 38,000 PH/s, or roughly 30%, with many miners withdrawing due to unprofitable operations. However, it seems that with the December 18 mining difficulty adjustment, at least a short-term bottom might have been reached, and the estimates call for a 7–8% increase in difficulty during the next cycle.
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