Bitmain Losing its Market Share as Customer Base Moves More and More Out of China: BitMEX Report


  • MicroBT eating into Bitmain’s lead, having a share of 35% in 2019
  • Bitmain still leading in energy efficiency with its brand new Antminer S19 Pro followed by MicroBT’s Whatsminer M30S++, Canaan Avalon 1146 pro, and Ebang

“Competition has tightened within the ASIC manufacturing industry,” stated BitMEX in its latest research report noticing the presence of big players like Bitmain, Canaan, Ebang, and MicroBT.

According to the report, post halving, both the ASIC manufacturing and mining farm operating sector will consolidate further.

Meanwhile, China which is still dominant in ASIC manufacturing has already started losing share in the mining farm operator business to Europe and North America.

“The customer base is moving more and more out of China,” said MicroBT marketing manager Elsa Zhao. The average customer size is also growing considerably but instead of longer small businesses or individuals, they are now larger funds, he said.

The Race to Lead

In late 2012 to early 2013, Butterfly Labs was leading the bitcoin mining industry but after it was shut down on the request of the US courts, it left Avalon as the market leader.

However, from 2015 to 2018, it was Bitmain who had the dominant position with the most efficient products.

“At the height of Bitmain’s power during the 2017 bull market, its market share was around 75%.”

The largest bitcoin mining manufacturer Bitmain’s dominance has been reducing, significantly so in the last 18 months or so. The largest player in the space is currently going through a power struggle between the company co-founders Micree Zhan and Jihan Wu.

Amidst the increasing competition, MicroBT is the one gaining traction and eating into Bitmain’s lead, having a share of 35% in 2019.

Relatively new to space, the company is founded by the former director of design at Bitmain which completed a round of financing in January 2019 at a valuation of $700 million.

The IPO Failures

Bitmain unsuccessfully attempted to IPO in 2018 but it remains on their agenda, however, BitMEX cautioned,

“it seems almost impossible to imagine Bitmain conducting a successful IPO until the above management difficulties have been resolved.”

Canaan however, did have a successful IPO and is the first Bitcoin ASIC manufacturer to market it to the public markets. But it’s performance has been extremely bad since the IPO, generating a full-year net loss of US$149.8 million in 2019. Canaan attributed these losses to COVID-19 but,

“going forward it may be challenging for the company to regain trust from investors following on from the write-down so shortly after the IPO.”

CAN shares are down 77% since the IPO while Bitcoin price is up 17% during the same period.

Just like Canaan, Chinese ASIC manufacturer Ebang is struggling with declining sales and inventory write-down driving losses. The company has also filed for an IPO in the US after a previous failed attempt to list in Hong Kong. The risk here, however, is lower.

Product Strength

When it comes to technology, Bitmain lost its lead in energy efficiency as well in the last year or so. MicroBT’s products have been more efficient than bitcoin, with the Whatsminer M30S++ operating at around 31 J/TH. However, it is marginally behind Bitmain’s brand new Antminer S19 Pro product at 30 J/TH.

Meanwhile, Canaan might release its 5-nanometer products in the market by 2021. In its quarterly report, it also mentioned the new Avalon 1146 pro, which will have an efficiency of 42 J/TH, compared to the currently on sale Avalon A1166 at 47J/TH. The new product, however, would still place it behind MicroBT and Bitmain.

Ebang’s latest product has an efficiency of about 57 J/TH, ranking it behind all of the other three players.

According to BitMEX, the lifespan of ASIC mining machines is likely to extend considerably.

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