BLOCKCHAIN
BLOCKCHAIN
BLOCKCHAIN
GMO Internet quits bitcoin mining business following $321M loss
Japanese IT giant GMO Internet Inc. is walking away from the cryptocurrency industry, announcing that will no longer develop, manufacture or sell bitcoin mining hardware.
The decision, while directly related to the precipitous drop in the price of bitcoin this year, was specifically attributed to GMO Internet being forced to record a massive loss in its cryptocurrency division.
On a consolidated basis, GMO Internet reported a loss of 35.5 billion yen ($321 million) in the fourth quarter with a 24 billion yen ($217 million) loss coming from its hardware arm and 11.5 billion yen ($103.5 million) loss coming from its in-house mining division.
“After taking into consideration changes in the current business environment, the company expects that it is difficult to recover the carrying amounts of the in-house-mining-related business assets, and therefore, it has been decided to record an extraordinary loss,” the company said in a statutory filing reported Wednesday by Coindesk.
GMO Internet itself is a broad-reaching Japanese tech firm with interests in online advertising and media, internet financial services and mobile entertainment. Its entry into the cryptocurrency market, however, was poorly timed.
It debuted in September 2017 at the height of the cryptocurrency bubble with an in-house designed 7-nanometer bitcoin miner. The cryptocurrency market peaked in late December 2017 and early January 2018, with prices crashing by more than 80 percent and more in some cases since then.
GMO Internet may survive its exit from the cryptocurrency mining business, but market leader Bitmain Technologies Inc., the company GMO was attempting to mimic, is in all sorts of trouble.
On Christmas Day, it was reported that Bitmain was in the process of laying off up to half its staff, amid reports of bitcoin mining companies declaring bankruptcy and bitcoin mining equipment being sold for scrap. Unlike GMO Internet, Bitmain doesn’t have an alternative business it can fall back on if cryptocurrency prices continue to plunge.
Image: GMO Internet
A message from John Furrier, co-founder of SiliconANGLE:
Support our mission to keep content open and free by engaging with theCUBE community. Join theCUBE’s Alumni Trust Network, where technology leaders connect, share intelligence and create opportunities.
- 15M+ viewers of theCUBE videos, powering conversations across AI, cloud, cybersecurity and more
- 11.4k+ theCUBE alumni — Connect with more than 11,400 tech and business leaders shaping the future through a unique trusted-based network.
About SiliconANGLE Media
SiliconANGLE Media is a recognized leader in digital media innovation, uniting breakthrough technology, strategic insights and real-time audience engagement. As the parent company of SiliconANGLE, theCUBE Network, theCUBE Research, CUBE365, theCUBE AI and theCUBE SuperStudios — with flagship locations in Silicon Valley and the New York Stock Exchange — SiliconANGLE Media operates at the intersection of media, technology and AI.
Founded by tech visionaries John Furrier and Dave Vellante, SiliconANGLE Media has built a dynamic ecosystem of industry-leading digital media brands that reach 15+ million elite tech professionals. Our new proprietary theCUBE AI Video Cloud is breaking ground in audience interaction, leveraging theCUBEai.com neural network to help technology companies make data-driven decisions and stay at the forefront of industry conversations.
