Fundamental Labs, (Backed By Coinbase, Binance, Canaan), Puts $44 Million Into Bitcoin Mining Setup
Fundamental Labs Will Invest $44 Million USD In New Bitcoin Miners
A blockchain fund manager called Fundamental Labs is set to invest $44 million UD in new Bitcoin miners. This is a huge bet, as the crypto market is starting to recuperate now but nobody knows fast it will be. The company is backed by giants like Coinbase, Binance and Canaan Creative.
The company has now revealed to the media that it plans to buy from 20,000 to 30,000 units of brand new miners in order to use the cheap electric energy that will be available in the rainy summer season of China.
According to Howard Yuan, managing partner of the company, mining can be considered the “fundamental block” that supports the crypto world. This is why the company is now focused on investing more in this particular part of the industry.
However, most miners are currently buying second-hand miners instead of new ones and the company wants to get ahead of the others by purchasing only the most highly developed technology. This way, by buying miners such as the AntMiner S17, the company will maximize its investment.
As the unit price of miners is ranging around $1,500 to $2,000 USD recently, the company will be able to buy large quantities of miners with this amount of money. Yuan affirmed that the focus is to buy new machines instead of old ones because it will let the company be competitive in the market for a longer span of time.
The capital to make this new investment came from a deal that was recently closed by the fund, in which the goal was to raise over $150 million USD. The money will be used in order to invest more in crypto mining technology.
Yuan affirmed that the company was originally launched in 2016 and that it had $30 million of proprietary capital at the time, growing its portfolio in over $500 million USD after they were able to make five funding rounds. At the moment, the company is invested in both Coinbase and Binance’s BNB token, for instance.
Some of the other investors of the company come from family offices in China and from traditional industries as well. Yuan also affirmed that his company will be considerably less risky than some other companies because it will not invest only in cryptos but also in some less risky products. The company also highlighted that the risk of such a big company is smaller than individual miners.
New Miners Will Possibly Increase Hash Rate
Unfortunately, the most obvious effect from the company entering the crypto space with such powerful hardware is that it will likely boost the total hash rate of BTC soon.
The new Bitmain AntMiner S17 can produce as much as 45 to 50 trillion hashes per second (TH/s), while some models can go as high as 70 TH/s. Even running 20,000 rigs at 45 TH/s would be quite an impact in the market and it would add 1,000 PH/s to the total value, which is currently in 50,000 PH/s.
This would an increase of at least 2% even in the lowest case scenario. In the case of 30,000 rigs of 70 TH/s, it could easily go over 4%.
According to some specialists, the hash rate could go as high as 70,000 PH/s during the Chinese summer.
Yuan has affirmed that the company intends to raise more $150 million USD this year and that a part of this could be used to invest in more miners. This means that it could easily scale up to more 60,000 or 100,000 units during the year, which would consolidate an enormous army of mining power.
After the rainy summer season, the company will shift its focus to other stations in China, as well as in countries like Kazakhstan to remain profitable.