Crypto behemoth Bitmain is starting to struggle as reports of lost market share have been recently released. Sanford C Bernstein and Co, an investment research shop, first reported that Bitmain has been losing technological advantages to rivals such as Canaan and Ebang International.
Bitmain has been working to diversify their portfolio as in the past, they have made most of their revenue from selling mining equipment. The technology is constantly changing and improving so they have been able to hold the market as a monopoly but this trend is starting to change.
The company recently has expanded their revenue streams to include actually mining cryptos along with investing in tech and crypto startups. CEO Jihan Wu even went as far to say that the majority of their income within the next 5 years will come from selling AI chips rather than mining technology and equipment.
There have been some growing pains as Bitmain looks to expand their business. They received significant backlash on their sale of mining equipment for Monero despite having knowledge that it was useless. They have been working to regain customers’ trust but have been able to make strides towards that goal.
Bitmain also announced plans to IPO which has raised some doubts on their true current financial situation. Their pre-IPO documents showed that they lost nearly half a billion dollars as most of their cash is tied up in cryptos, namely Bitcoin Cash. Still they are being quoted in the $18 billion dollar valuation which would make it one of the larger IPOs recently.
This situation shows how difficult it can be for a major company to find their identity with the rapidly changing tech scene. Bitmain was said to have control of over 85% of the mining equipment market but even they now must find new ways to continue their growth as the field starts to shrink.