A few days ago, Japanese Internet giant GMO announced its second-quarter results for the fiscal year. It talked about the performance of the crypto-exchange business and the mining business. The profit for the quarter increased by 7 times.
The earnings report details the performance of the company’s cryptocurrency business and changes in future plans.
The situation of GMO is a microcosm of the entire cryptocurrency market, and it is also a constant attempt by the traditional Internet giants in the new era.
The overall encryption business increased by 7 times
According to the report, GMO’s overall encryption business ” has generated 2.6 billion yen (about 23.5 million US dollars) in revenue in just one year of launch.” In the second quarter of this year, the company’s operating profit was 250 million yen (about 2.26 million US dollars), while the previous quarter’s operating loss was 730 million yen (about 6.6 million US dollars).
It can be seen that although the encryption business market is now in a period of depression, players at the top of the industry food chain still have meat.
GMO Coin is the company’s crypto-exchange business, with revenue growth of 7.3 times in the second quarter . Net income for the second quarter was 1.42 billion yen (about 12.82 million US dollars), and operating profit was 550 million yen (about 4.97 million US dollars). In the first quarter of this year, the subsidiary lost 760 million yen (about 6.86 million US dollars).
In addition, GMO also revealed that its “crypto exchanges are growing steadily” and opened approximately 177,000 accounts in one year.
In particular, the cryptocurrency exchange is a “God” role in the current cryptocurrency market, which determines the coming and going of the project, and the ongoing processing costs, earning a lot of money.
Mining business grows 90% but loses
GMO’s encrypted mining business recorded revenue of 1.17 billion yen (US$10,568,436) in the second quarter, up 91.8% from the previous quarter . Although “our hash rate has increased as expected”, the overall loss was 360 million yen (about 3,252,429 US dollars). Noting that “loss exceeded our expectations,” the company began to change its mining business strategy.
In July, GMO mined 568 bitcoins , a slight increase from 528 bitcoins last month. However, the hash rate in July was 384 PH/s, which was the same as last month.
GMO said the losses came from external “ uncontrollable factors ”, namely the lower price of bitcoin and the rising total hash rate, and elaborated on the changes in priorities.
Previously, the company’s top priority was to mine cryptocurrencies internally, followed by cloud mining services to the public, and finally the sale of mining machines. The new strategy puts the sale of mining machines in the first place, followed by internal excavation and finally cloud mining services. The company will also “ensure a cheaper power supply” to reduce the cost of mining electricity.
GMO hopes that a change in strategy will result in greater control over its investments and an earlier return on investment. At the same time, the company plans to sell GMO mining machines B2 and B3 at the end of October.
Who can be seen from the GMO Internet companies to enter the blockchain microcosm, exchanges, virtual currency mining, mining machines, these digital currency up the food chain.
Even in such a bear market, a large number of mining machine manufacturers are still on the market, and the exchanges are opening more and more. Exchanges and mining machine manufacturers, respectively, grasped the two entrances to the digital currency, namely production and sales.
However, the major mining machine manufacturers have a single business model, which is mainly based on the development and sales of mining machines. Coupled with the sluggish encryption market, the sales of mining machines have bottlenecks. This requires mining machine manufacturers to have new breakthroughs in products and business.
Different policies in different countries and regions have also added a lot of uncertainty to the development of mining machine manufacturers.
When GMO’s new strategy is still to focus on mining, the mining industry leader has begun to explore other chip technologies such as artificial intelligence .
A few days ago, domestic mining machine manufacturer Jia Nan Zhizhi announced that it would realize the world’s first 7nm chip mass production, which caused great concern in the industry.
In short, the times gave opportunities for new students, but also gave the giants a solid foundation and continued to occupy the Highlands. Perhaps life and death, this is a problem of persistence and change.
[su_quote]This article is writing on 16 Aug 2018 based on information available online & news portal. If you feel it’s outdated or incorrect, please write here to update it. Mail us: [email protected] Or Whatsapp Us- +13098896258[/su_quote]
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