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. Read More