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Slowdown in Crypto Mining Industry Finds Bitmain Struggling – Report

source-logo  thecoinrepublic.com 10 October 2023 21:32, UTC

The cryptocurrency industry has been going through another crypto winter after attaining its last all-time high in November 2021. For about a year now, trading prices of major cryptocurrencies have been reluctant to show any higher moves. The repercussions of such tightened progress reflect on closely knitted industries. The crypto mining industry is one facing a tough face in the aftermath. So much so that industry behemoth Bitmain started feeling the heat.

Recently leading crypto mining hardware manufacturer, Bitmain, reported to face issues with financials. The company even struggled to pay salaries to employees and halted it till October 7, according to local media outlets.

Bitmain is known to be the top company in terms of manufacturing application-specific integrated circuits (ASICs) and is headquartered in Beijing, China. The company holds somewhere around one-third of the overall crypto-mining hardware manufacturing market in the world. Its Antiminer is synonymous with Bitcoin miners all over the world.

Despite the blockade of the crypto industry in China, the company has accumulated a sheer size in the last several years. It almost holds a monopoly in the sector. Yet the struggling financials of behemoth companies like Bitmain raise concerns about the existing situation and potential future of the crypto industry.

As per reports, the internal message of the company noted that the company saw unsatisfactory results in terms of cash flow recovery for September 2023. In addition, there were some business units that were not performing as per the expectations.

Bitmain’s Performance Reflecting Crypto Market Struggle

The broader cryptocurrency market is going through a slowdown as major crypto assets’ prices are resisting to make any major move. The prices of major cryptocurrencies like BTC and ETH have not seen an increase in the past few months.

Bitcoin is currently trading at $27,636 following a slight increase of 0.46% in the last 24 hours, while Ethereum was changing hands at $1,585 after losing over 4% of its value in a similar time period.

Such an underwhelming response from the crypto market has a direct impact on the crypto mining industry. To compensate for expenses, mining companies make up by haircut in orders placed for new ASICs.

Eventually, the low demand for mining apparatuses affects Bitmain’s production and ultimately its financials. The situation appears to stay like this for a while as no notable change is expected in the near future to pump optimism in the market, except for the forthcoming Bitcoin halving.

Though crypto mining companies might not be placing new orders with Bitmain in bulk, some major companies are buckling up prior to the halving. Miners are looking to secure their positions as mining reward-slashing rewards are likely to scale up the competition in the arena and making a profit might be tougher than ever.