As new industries go, crypto mining has begun raking in the moolah pretty quickly.
According to a Bloomberg report, mining cooperative Bitmain, which has an approximately 80% share of the industry, generated more than $2.5 billion in revenue last year. That figure is less than the $3 billion to $4 billion estimate for the company’s revenue put forward by Bernstein Research this past February. (See also: Who Is Jihan Wu And Does He Basically Control Bitcoin Today?)
But it still speaks to the industry’s growing prospects. Bitmain competitor Canaan Cooperative generated $203 million in revenue last year. The Beijing-based company is responsible for approximately 15% of the bitcoin mining industry and has already filed for a $1 billion IPO in Hong Kong later this year. Ebang, another cryptominer, has inked an agreement with Samsung to produce Application Specific Integrated Circuits (ASIC) which are used in mining machines. (See also: Nvidia Crypto Rival Has Morgan Stanley Worried)
A Market That Is Expected to Grow
In its February report, Bernstein Research pointed out that Bitmain had reached its revenue figures a mere four years after being founded, while Nvidia Corp. (NVDA), another major chip manufacturer, took 24 years to reach that target. The frenetic pace of revenue growth for the industry is predicted to continue into the future. Crypto mining is expected to account for as much as ten percent of chip manufacturer Taiwan Semiconductor Manufacturing Co.’s (TSMC) overall revenue figures this year.
Bitmain has cornered the market for ASIC chips, which contain special processors to optimize the mining process for speed and efficiency. These chips are required for cryptocurrency mining rigs to scale operations because they enable a rapid supply of coins. Bitmain has capitalized on the demand for its processors by hiking the prices of its mining equipment. Costs for the Antminer range, which is the most commonly-used mining machine, range from several hundred dollars to $5,000. The company also makes money from operating the largest mining pool for bitcoin. Bernstein Research wrote that the company collects management fees from customers for the pool’s operations. In addition to this, Bitmain rents mining power through the cloud and also generates revenue through mining.
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