Internal struggles at Bitmain, the biggest Bitcoin mining equipment maker in the world, are persisting. It is opening up the global crypto-mining industry to new entrants for the first time since 2014.
Canaan, the other dominant Bitcoin mining equipment manufacturer listed on the Nasdaq, is also finding it challenging to uplift their operations.
The stock price of Canaan declined from $8.98 to $2.12, dropping by 76 percent since its listing on the U.S. stock market just seven months ago.
Crypto mining sector will likely see new dominant companies
The Bitcoin mining equipment industry is a tough sector to enter for startups.
It has a high barrier to market entry for emerging companies — to manufacture and distribute mining equipment worldwide, a partnership with major semiconductor companies is necessary to sustain stable operations.
Canaan and Bitmain, for instance, are working with Taiwan Semiconductor Manufacturing Company, one of the biggest semiconductor corporations in the world alongside Intel, to produce ASIC mining chips. To work with top semiconductor manufacturers, companies need to secure a sizable deal as firms like TSMC tend to prioritize deals with larger conglomerates like Apple.
For new entrants, it is challenging to secure a consistent flow of mining chips and distributing them to clients globally. But, the lackluster performance of Canaan and the alleged dispute between Bitmain co-founders Jihan Wu and Micree Zhan are shaking the crypto mining sector.
Last week, Primitive Crypto founder Dovey Wan said that Zhan reportedly brought private guards to the Beijing office of Bitmain to retain control of the company.
“Micree today led a team of private guards crashed Bitmain Beijing office … they broke in by brute force and tried to take back the control (after Jihan’s initial coup and series of outrageous behavior)”
She added that Zhan seemingly took control of the Beijing office and encouraged employees to work for him, explaining:
“Seems like Micree took the power back. a official letter signed by him was published today (after above ‘break in’) calling employees ‘it’s time to back to the office and seize the opportunity.’”
One of the newly emerging crypto mining equipment manufacturers is Microbt. Also based in China, the company recently released the M30S++ miner with 112 terahash per second capacity.
In February, Bitmain revealed two new mining chips with capacities of 95 TH/S and 110 TH/S, both lower than the M30S++.
Better specs, less risks
The key for new entrants in the crypto mining sector to compete against Canaan and Bitmain is to focus on better specifications with less risks for clients.
In 2018, Bitmain reportedly sought a valuation of $50 billion in its initial public offering (IPO) plan.
But, the once-dominant Bitmain is losing market share to Canaan, Microbt, and other small manufacturers like Ebang. It leaves the crypto mining market up for grabs in the medium to long-term.
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