Bitmain changes its mining sales strategy to stop the decline in market shares after the return of the co-founder of the company Jihan Wu. In our cryptocurrency news today, we find out more about the strategy.
During a customer event hosted by Bitmain in Chengdu, China, Wu showed up on stage for the first time as the one and only chairman and CEO of the company after a month of regaining control. Addressing the clients and partners, he explained how Bitmain changes its tactics just to restore the market dominance of the company. Essentially, he proposed to sway the miners and them to stick to Bitmain’s products by having the company risk it all regarding cash flow, price volatility and electricity costs.
By doing this, Bitmain is betting that the price of Bitcoin will jump next year during the scheduled halving of the mining rewards which will reduce the new supply created with each block of transaction. Whether the next halving will spark a slight rally as the first two did, is still a subject of debate. While the event was only meant for customers, the company’s presentations show that Bitmain has even rolled out three main tactics to appeal to mining investors. To start with, it seems like Bitmain has replaced the previous sales strategy wherein customers had to pay the full amount in advance for mining equipment because of future shipments with a tired down payment structure.
Another tactic that Bitmain plans to roll out is to target those who own mining farms with power resources but still don’t have enough equipment to use the full capacity. The company said it will offer a co-mining agreement that runs for a year for mining farm operators to rent the flagship AntMiner S17. Bitmain will also cover the electricity costs at 0.35 yuan per kilowatt-hour while the mining farm operators remain responsible for maintenance.
In return, Bitmain will retain up to 75 percent of the mining profits and all of the farm operators will take the remaining 25 percent. If the mining revenue is less than the electricity cost, all of the miner coins would go to Bitmain. Through this plan, Bitmain could increase the capacity in mining for itself which is an investment that has decreased over the past two years as the company focused on selling the equipment.
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