Report Reveals Crypto Mining Giant Bitmain Lost $625M, Profit Expected in April

The China-based crypto mining equipment manufacturer Bitmain reportedly lost $625 million during the first two months of 2019. This is at least if a fresh report from a local media outlet is to be believed.

Bitmain reportedly lost over half a billion in two months

This news was first covered by the Chinese, Tencent-run news outlet QQ on August 2nd. Bitmain is one of the most well-known manufacturers of so-called Application Specific Integrated Circuit (ASIC) equipment for crypto mining.

We recently covered how one of Bitmain’s main rivals, Canaan Creative, has reportedly filed for an IPO in the United States. At the time, it looked like Bitmain’s attempt to file the first US IPO for a crypto mining equipment manufacturer had been foiled.

Moreover, this most recent report also alleges that Bitmain also bled cash during the two first months of this year. Specifically, the report says that Bitmain experienced losses of $345 million in January, and $280 million in February.

All in all, this all equals a whopping loss of $625 million during the year’s first two months. According to QQ, these results are due to offloading inventory of outdated mining equipment at low prices.

Will new 7 nanometer mining rigs lead Bitmain to profit?

Specifically, Bitmain is said to have cleared its inventory of ASIC mining equipment using outdated 16 nanometer processors at significantly reduced prices. These machines will be replaced by new mining rigs using more competitive 7 nanometer processors.

The same report from QQ goes on to suggest that Bitmain is reportedly expected to reach a gross margin of 30% in April. This uptick in gross margin is supposedly attributed to the Antminer S17 series mining rigs, using the new 7 nanometer chips.

Although the report is light on further details, Bitmain could well be on the way towards profitability. Back in March of 2019, the ASIC manufacturer released a blog report. It reveals the Antminer S17, featuring improved energy efficiency and a higher hashrate, would launch on April 9th of 2019.

Furthermore, a $315 million March profit for Bitmain indicates the losses during the first months of 2019 may be reversing. According to Yahoo Finance, Bitmain has refused to comment on this latest QQ report. 

With this being said, however, one should note Bitmain also lost around $500 million in the third quarter of 2018. As such, the future performance of the ASIC giant can give some insight into the state of the ASIC industry.