GMO Internet Exits Bitcoin Miner Production After Recording “Extraordinary Loss” in Q4
Japanese internet giant GMO Internet Group is quitting the Bitcoin mining hardware sector, Cointelegraph Japan reported Dec. 25 referencing a public document.
Citing “extraordinary loss” in Q4 this year, GMO, which began its foray into Bitcoin mining in 2017, said that it will “no longer develop, manufacture and sell” miners.
Likewise the document reads: “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”.
GMO will further relocate its mining operation “to a region that will allow us to secure cleaner and less expensive power supply.”
The news makes GMO the latest casualty of the 2018 Bitcoin (BTC) bear market, with falling prices taking their toll on mining profitability.
As Cointelegraph reported, scenes from China showed mass dumping of hardware, followed by news of redundancies from major player Bitmain.
After closing down its Israeli operations, this week, new reports suggested that Bitmain was preparing to fire up to half of its 2500-strong workforce. The problem of production costs is a reality in large companies, which are dedicated to the exploitation of cryptocurrencies, when the growth is greater, the fall can be resounding, the evidence in reality are obvious.
GMO’s consolidated losses for Q4 totalled 35.5 billion yen ($320 million), while the unconsolidated loss tally will be around 38 billion yen ($334.5 million).
The company said that the losses had not impacted its “financial integrity.”
Conversely, in November, the company had reported “historical” performance of its cryptocurrency projects in Q3, which included mining hardware sales. Profits had totalled 2.6 billion yen ($22.8 million). After this information, a completely different reality is presented, which shows that a company can be generating profits and suddenly changes the information, all due to low appreciations of its main raw material, such as cryptocurrencies.
It is important to emphasize that bitcoin and its financial health can be prosperity or failure for the companies that conform around it, the important thing is to be successful in the possibility of looking a little further and continue in this search for balance. It waits for new ads.
Disclaimer: InfoCoin is not affiliated with any of the companies mentioned in this article and is not responsible for their products and / or services. This press release is for informational purposes information does not constitute investment advice or an offer to invest.