China’s Bitmain made up to USD 4 billion in operating profit for 2017 - Bernstein

The Chinese Bitcoin mining specialist beats Nvidia by profitability

by Viko
26 February • 1,5 min
In Markets

Bitmain, a four-year old Chinese company that specializes in Bitcoin mining, has made an operating profit of some USD 3 billion to USD 4 billion for 2017, research firm Bernstein has estimated.

The analysis, presented by CNBC, is based on a conservative estimation of gross margin of 75% and operating margin of 65%.

For comparison, a 24-year old US rival to Bitmain, chip maker Nvidia, has made an operating profit of about USD 3 billion last year, according to Bernstein calculations.

Nvidia GPUs (graphics processing units) are popular among Bitcoin enthusiast miners as a necessary hardware to perform the job of solving complex mathematical problems for a reward. At the same time, Bitmain produces a specialized ASIC (Application-Specific Integrated Circuit) hardware that allows for larger scale and more profitable mining.

According to Bernstein, Bitmain has some 70% to 80% market share in Bitcoin mining and ASICs. A large part of its revenue was generated thanks to the surge in Bitcoin prices last year, as the company raised the prices of its mining hardware in line with the growth in Bitcoin prices, while its production costs remained largely flat. Bitmain’s bestselling Antminer S9 reached nearly USD 5000 per unit