In news out earlier today, it was revealed that Bitmain likely made close to $4 Billion last year.
If you are not familiar, Bitmain manufactures mining hardware, designed their own ASIC chip, and runs their own mining operations, including their own mining pool.
According to estimates by Bernstein Research released this week, Bitmain made roughly $3-$4 Billion last year alone.
For comparison's sake, that bests the 24 year old technology hot shot Nvidia, who was said to have made roughly $3 Billion in profits last year.
Bitmain has been around since 2013, to give you some perspective on how impressive that is.
How did they make their money?
You can see a breakdown of their revenue sources here:
However, the bulk of that revenue likely came from the selling of their mining products.
On top of that, Bitmain was able to increase the price of their bitcoin AntMiner S9 as the price of bitcoin increased.
The beauty for them was that since there aren't many legitimate competitors, they are able to adjust the price of their miners depending on the market price of bitcoin.
(It is estimated that they currently have 70-80% of the bitcoin mining market.)
As you can see here, the S9 model was selling in the hundreds of dollars at the beginning of the year to costing over $5k when bitcoin was at all time highs:
The beauty for the company is that the cost of production for this product was basically unchanged.
Which means the increase in sale price is all profit for the company.
The original gold rush all over again.
Similar to what happened in the original gold rush days, instead of the people doing the gold mining becoming rich, it was the ones selling them the tools to mine the gold that really became rich.
IE, the ones selling the picks and the shovels.
In this case it is no different, the most profitable company in the cryptocurreny space was the one that was selling the mining equipment to the miners.
Not to mention it has already been reported that Coinbase made over a billion dollars last year as well.
Based on this information, it seems the ones that are really printing all the money right now are the ones that are facilitating the cryptocurrency markets as opposed to the ones strictly investing in in them.
Stay informed my friends.
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