Japan’s GMO Internet Suffers Heavy Crypto Mining Business Losses in 2018 Causing Change of Plans
In another lethal blow for the global Bitcoin mining industry, Japanese internet giant GMO Internet Group has decided to finally fold its mining operations for good.
The reason for this move as per the company’s executive brass is that all through Q4 (2018), the firm has been incurring “extraordinary losses” due to which GMO is no longer in a position to be developing, manufacturing or selling its mining rigs.
In relation to the matter, a representative for the company noted:
“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.”
More On The Matter
In terms of how GMO plans to carry on with its business operations in the future, a spokesperson for the company said that they are now looking to relocate their entire mining operation to a country/ region where power availability is not an issue (as well as where the mining process is cheaper and more sustainable).
As a result of current bear market, GMO has now become the latest company to wrap up its ongoing mining operations — especially since profitability in this sector has dipped quite substantially over the course of the past 3-6 months.
Not only that, many of our readers may also remember that sometime back it was reported that Chinese mining giant ‘Bitmain’ had dumped a bulk of its mining hardware rigs so as to minimize its long term losses. Additionally, Bitmain also shut down its Israeli HQ recently amidst rumors that the firm was all set to fire more than half of its current workforce (that is estimated to be around 2,500 people).
To put things into perspective, GMO’s total incurred losses are estimated to be a whopping $320 million (while the unconsolidated loss tally is pegged to be somewhere around $334.5 million).
Even though the folks over at GMO have continued to state that these losses will not impact the “financial integrity” of the firm, it now remains to be seen how the company deals with its ongoing economic situation from here on out.