Fluctuation in bitcoin price affects cryptocurrency mining in Japan

Cryptocurrency mining seems to be declining in Japan. Some important companies in the sector are closing due to the effects caused by the fluctuation in the value of bitcoin in the last months of 2018. The fear that this situation will continue in the year that has just begun is the main reason for this decision.

Undoubtedly, mining has been negatively affected by the drop in the price of the main cryptocurrency, bitcoin. In Japan, the giants of this sector of finance face a decrease in profitability, which is dramatic given that it is their main economic activity.

The high cost of operations has led to consolidated companies such as GMO, online sales retailer, to consider the investment. Another factor that has also generated discomfort is the uncontrolled increase in mining worldwide. The high price of energy needed for mining can not be underestimated, which makes Japanese companies look towards Europe, where these costs are lower.

According to the report on this situation, GMO suspended its commercial activity and the development of equipment for mining. “The measure will cost the company an estimated 25 billion yen (approximately 28 million dollars).”

Another company that has been affected by the fall in the price of bitcoin is DMM, which in 2017 launched its virtual currency, then started the mining of bitcoin, ethereum and litecoin. It had plans to become one of the world’s top ten miners, but these were shelved by the ongoing theft of mining hardware and safety concerns at the site. Currently, the firm is selling its equipment.

Analysts estimate that cryptocurrency mining could suffer a serious stagnation not only in Japan but also in China, where the giant Bitmain, a global supplier of mining equipment, went through a dramatic situation after laying off 80% of its personnel.

M.Pino

Source: Bitcoin.es

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