Japanese Internet Giants Shutter Crypto Mining Operations

As Bitcoin and crypto prices continue to fall profitability from mining using certain types of hardware inevitably follows suit. Japan has a number of high profile corporations heavily invested in mining operations and it looks like they are about to pull the plug.

Closure of Crypto Mining Hardware Production and Farms

According to reports in local media, Japan’s online retail giant GMO is pulling out of the Bitcoin mining hardware industry. As hash rates increased while prices fell, mining competition also intensified putting the pressure on profitability. In response to this GMO has decided to withdraw from sales and development of mining equipment which is now no longer profitable despite hash rate falling a little recently.

The report goes on to state that this painful move cost the company 25 billion Yen. It aims to continue mining itself and is currently seeking out crypto-friendly nations in northern Europe with more favorable electricity prices. A cryptocurrency exchange is also in the pipeline according to a translation of the article.

In addition to GMO’s shift away from hardware production, Japanese ecommerce giant DMM is also reportedly making an exit from the crypto mining industry. The company has cited ‘deteriorating profitability’ as the primary reason adding that “the withdrawal process such as the sale of the machines will go over to the first half of 2019.”

According to reports, DMM will be focusing on its exchange platform which has already achieved full regulatory and license status in Japan with only 15 others. DMM began operation of a large scale mining farm in Kanazawa last year when it started mining Bitcoin, Ethereum and Litecoin. Grand expansion plans were put forward and the farm was slated to run a thousand machines over 500 square meters of floor space. The company also announced a showroom and tours around the facility for the public but this never materialized.

Things started to go south in the latter half of 2018 when plans were shelved due to security concerns at the site and repeated theft of mining hardware. DMM also curtailed the planned launch of its crypto trading app Cointap as it downsizes on virtual currencies.

China’s Bitmain is also feeling the pinch as it reportedly fired 80% of its workforce. Fears of running out of cash could result in a selloff of the hordes of cryptocurrencies the company currently holds. The mining industry appears to be declining now as fast as it grew last year in the tumultuous world of crypto, and as we have already witnessed in 2018, what goes up must come down.

Image from Shutterstock