Due to the unfavorable market conditions for cryptocurrencies, GMO Internet Group has been pushed to terminate its Bitcoin mining activities.

Information filed by GMO Internet Group reveals that the Japanese internet titan has officially decided to cease activities in its mining sector. crypto-mining The company’s report verifies that they will halt all actions related to the 'development, manufacture, and sale' of mining hardware, attributing this to severe financial setbacks.

The document, which was titled A note on 'Excessive Financial Loss Tied to Cryptocurrency Mining Business Restructure' threw light on how the sector posted substantial financial deficits in the last quarter of 2018 for GMO.

Going further, the document notes:

In light of recent shifts in the business landscape, the Company predicts insurmountable challenges in recovering from the capital tied up in its mining operations, triggering the decision to incur a notable financial loss.

GMO set up its dedicated mining business in late 2017 during the height of Bitcoin’s market surge, operating through various subsidiaries, including two Swiss firms and a mining infrastructure.

Analysis of the company's documentation suggests that high electricity costs were a significant drain on the division's efficiency. Given the sustained rise in power costs and the declining worth of the mined coins, neutralizing this imbalance proved difficult for the group. Thus, GMO considers relocating its Bitcoin mining division to areas that might lessen these power expenses.

To address these issues, the company plans to 'shift the mining center to a region where acquiring more affordable and cleaner energy is feasible.'

By the fourth quarter of 2018, GMO's cumulative financial shortfall reached 35.5 billion Yen, equivalent to $320 million, with separate figures indicating a rise to 38 billion Yen or $334.5 million.

Positive Q3

This closure announcement has taken many by surprise, considering the cryptocurrency division notched up hardware sales along with a cumulative profit of 2.6 billion Yen ($22.8 million) in the third quarter of 2018. reported favorable performance GMO reassured stakeholders that despite these losses, the company’s overall 'financial standing' remains robust and unaffected.

With GMO’s recent closure news, it joins the list of victims in the ongoing bearish crypto market. Earlier announcements mentioned Nvidia, a GPU and mining hardware maker, being significantly hit as well.
In the final quarter of 2018, Nvidia was notably impacted on the S&P 500 index due to prolonged crypto price downtrends affecting their sales and income. worst performer Nvidia's investors widely offloaded stocks this quarter, afraid of further bearish impacts, causing a 54% devaluation in its stock price. AMD, another GPU vendor in the crypto space, observed its Radeon RX580 graphics card's price plummet by around 67% since February.

GPU Manufacturers

The downturn in cryptocurrency value initiated then, severely cutting into GPU sales as interest dwindled. AMD reported 'negligible' crypto sales during the third quarter of 2018. February As November unfolded, the market's overall capitalization for cryptocurrencies sunk by over $100 billion. Within that timeframe, Chinese miners commenced mass sales of their equipment to cushion businesses from financial distress. its financial issues In the wake of faltering profitability trends, many in the crypto mining space faced inevitable closures.

Based in the UK, Jimmy has been an observer of blockchain's evolution over recent years, holding a hopeful outlook on its capability to democratize the financial environment. selling off Follow him on Twitter or reach out via email: [email protected].