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The virtual currency price has fallen! GMO lists tens of billions of losses and exits mining machine business

Feb 02 59
Japan's virtual money provider GMOInternet released a press release after the Japanese stock market on the 25th, announcing that it will provide a special loss related to the virtual currency mining business in this quarter (October-December 2018) financial report, amounting to approximately 35.5 billion yen. The mining business has raised about 11.5 billion yen in losses and the mining, R&D/manufacturing/sales business has a loss of about 24 billion yen.

GMO pointed out that the company began its own mining business in December 2017, but due to the current decline in virtual currency prices, the global hash rate (mining rate) has risen faster than expected, resulting in unpredictable mining. The market share has led to a deterioration in the profitability of the mining industry.

In addition, GMO began to engage in mining R&D/manufacturing/sales business in September 2018. However, due to the decline in virtual currency prices, the demand for mining machines decreased, and the price fell and the competitive environment was severe. In the future, we will no longer engage in research and development, manufacturing and sales of mining machines.

GMO pointed out that in the part of its own mining business, the depreciation and electricity costs of mining machines are the main operating expenses, and in the future it is considered to move the mining center to an area where cheap electricity can be obtained.

According to the Nikkei News, due to the possibility of optimistic about virtual currency, GMO decided to carry out research and development of mining machines on its own. However, due to the sluggish market conditions, the GMO mining machine business decided to withdraw without selling. In the mining business segment, GMO invested billions of yen in research and development of mining machine chips, which were originally scheduled to be shipped in October, but were delayed due to difficulties in purchasing the required electronic components.

According to the Harvest XQ Global Winner System quotation, GMO plunged 2.11% to 1,297 yen as of 10:00 am on the 26th of Taipei time. The performance was far less than the 1.09% of the TOPIX index (10:00). At the time of the offer, it fell to 1,220 yen (down 7.9%) and hit a new low in the past 20 months (as of April 25, 2017).