Despite some recovery in the crypto market from the year’s low level, but it has not been so promising for miners and mining equipment makers to continue to remain invested in the business. According to the latest news from the crypto mining industry, the Japanese internet giant, GMO Internet Group is shutting its crypto mining hardware business due to extraordinary losses in the fourth quarter.
As per the press release issued by the internet giant on 25th December, the Board of Directors of the company have resolved to post an extraordinary loss in the cryptocurrency mining business for the fourth quarter (October 1, 2018, to December 31, 2018) of the fiscal year ending December 2018.
The company’s mining business has reported a loss of JPY 35.5 billion or $321 million. The break up of losses incurred are as follows:
- In-house mining- Impairment loss of JPY 11.5 billion
- Development, manufacture, and sales of mining machines – Losses of JPY 24 billion
For the company, the things were a quite rosy previous quarter with profits at JPY 2.6 billion in Q3. The press release states:
“Regarding the current mining machine markets, the environment is increasingly competitive because of the decreased demand mainly due to the decline in the cryptocurrency price, the decline in the sales price, etc. After taking into consideration changes in the current business environment, the Company expects that it is difficult to recover the cryptocurrency-mining-business-related assets through selling mining machines, so the Company has decided to stop the development, manufacture, and sales of mining machines, thereby recording an extraordinary loss.”
All the stakeholders in the crypto mining industry are facing tough conditions due to the year-long bear market with miners unable to cover the costs of mining operations. Many small miners and mining rigs have stopped operation which has led to declining in difficulty rate or hash rate of Bitcoin network.
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