Miner Weekly: Bitmain is a Hidden Self-Mining Giant

BitFuFu filings shed light on its dependency on the mining hardware titan

This article first appeared in Miner Weekly, BlocksBridge Consulting’s weekly newsletter curating the latest news in bitcoin mining and data analysis from TheMinerMag. Subscribe to receive in your inbox once a week.

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It is not a secret that the world’s largest bitcoin mining hardware manufacturer not only sells equipment but also competes against its customers by operating self-owned machines. The question, though, is: to what extent? 

TheMinerMag has found recent filings from Bitmain-backed BitFuFu that show nearly 65% of the company’s cloud mining and self-mining revenues in the first half of 2023 went to Bitmain’s pocket. 

Long story short is that Bitmain may seem to be a minority shareholder of BitFuFu with 5%, but it is clear that BitFuFu’s business depends on Bitmain so much that Bitmain effectively owns it.

In the first half of 2023, BitFuFu mainly had two business lines: proprietary mining, and cloud mining, with about 15 EH/s under management as of June 30. 

Notably, a majority of the hashrate came from the S19XP miners it rented from Bitmain. Moreover, it was Bitmain that provided the hosting capacities for BitFuFu to plug in all the hashrate across US states and some other countries. 

That’s why almost 80% of BitFuFu’s cost of revenues in H1’23, net of depreciation and amortization, was paid to Bitmain. In essence, 65% of every dollar BitFuFu made over the period was made on behalf of the mining hardware giant. 

With Bitmain’s recent hosting deal with Core Scientific for an additional 4.1 EH/s, it is reasonable to assume Bitmain and BitFuFu are together operating at least 20 EH/s.

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