With the continuation of low bitcoin and crypocurrancy prices, the profitability of mining has declined. Japan has the largest number of leading companies investing heavily in mining and seems poised to stall.
Stop producing digital currency extraction devices
According to local media reports, GMO, a Japanese online retail giant, is pulling out of the mining industry. With rising retail prices and falling prices, competition in the mining sector has intensified, putting further pressure on profitability. In response, GMO decided to withdraw from sales and develop mining equipment that is no longer profitable despite a slightly lower retail rate recently.
The painful move costs society 25 billion yen, the report says. It aims to continue mining and is currently looking to find environmentally friendly countries in northern Europe at more favorable prices for electricity. The opening of a digital currency trading platform is also underway.
DMM also stops working in the mining sector
In addition to switching from GMOs to equipment production, DMM is also emerging from the mining sector. The company reported that the "deterioration in profitability" was a major reason for stopping production in early 2019.
According to reports, DMM will work to open its own trading platform, which already has full regulatory and licensing status in Japan with only 15 other companies. DMM began operating a large-scale mining farm in Kanazawa last year, starting with mining, etherium and lite quinn. Significant expansion plans were also planned and the farm was to operate thousands of machines over an area of 500 square meters. The company also announced a showroom and guided tours of the facility to the public, but this did not materialize in the field.
The situation began to worsen in the second half of 2018, when plans were halted due to site safety issues and frequent theft of mining equipment. DMM has also reduced the planned launch of Cointap trading, as it reduces the volume of digital currency transactions.
The Chinese mining company Bitmain is also weak in the sector, with a reduction of 80% of its workforce. Fears of cash outflows can lead to the sale of hordes of digital currencies currently held by the company. The mining sector appears to be retreating as fast as last year in the recovery world and, as we have seen in 2018, what should be rising should fall.