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Report: Beijing-Based Crypto Mining Company On Pace to Hit $10B in Revenue For the Year

By NexChange
FinTech, Blockchain

Forget everything you’ve heard about the struggles facing the cryptocurrency market – at least for a minute – because it turns out not everyone is struggling.

Despite Bitcoin dropping about 60 percent from its record high point in December – with possibly more pain aheadBitmain, a crypto mining equipment behemoth in Beijing, is on pace to pull in a mind-boggling $10 billion in revenue for 2018. That figure comes courtesy of TechCrunch, which saw a company fundraise overview that also showed the company had brought in roughly $2 billion in quarterly revenue in Q1.

Along with that impressive quarterly revenue, Bitmain reportedly added $1.1 billion in Q1 profits.

Per TechCrunch:

That growth is extraordinary. From the same source seen by TechCrunch, Bitmain’s revenues last year were $2.5 billion, and around $300 million just the year before that. The company reportedly raised a major venture round of $300-400 million from investors, including Sequoia China, at a valuation of $12 billion.

For comparison, popular cryptocurrency wallet Coinbase made $1 billion in revenue in 2017. In addition, Nvidia, a company based out of California that also makes computer chips, generated revenues of $9.7 billion in its 2018 fiscal year (2017 calendar year). Nvidia’s revenues were $3.21 billion in Q1 fiscal year 2019 (February-April 2018), and historical revenue figures show a general seasonal uptrend in revenue from Q1 through Q4.

However, there is a catch to all this success: TechCrunch notes that Bitmain “is on track to become the first blockchain-focused company to achieve $10 billion in annual revenue, assuming that the cryptocurrency market doesn’t drop further.”

One of the fundamental challenges facing any cryptocurrency mining manufacturer such as Bitmain is that the valuation of the company is largely based off the price of cryptocurrencies. The market in the first half of 2018 has shown that no one really knows when bitcoin prices and the cryptocurrency market will start picking up again. Additionally, according to Frost & Sullivan, the ASIC-based blockchain hardware market, which is the market segment that includes Bitmain and Canaan, will see its compound annual growth rate (CAGR) slow to around 57.7 percent annually between 2017 to 2020, down from 247.6 percent between 2013 and 2017.

But clearly recognizing this challenge, Bitmain “has raised significant private funding and has been expanding its business into mining new coins and creating new chips outside of cryptocurrency applications.”

And not only is Bitmain making a fortune in the production of bitcoin mining rigs, Quartz points out that the company is building a significant venture capital business as well, leading a $110-million fundraising round this year for Circle, the Boston-based cryptocurrency exchange and wallet startup.

Bitmain is currently exploring an IPO that would value the company between $40-$50 billion, according to TechCrunch.

Photo: Bitmain



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