The Bitcoin mining ASIC manufacturing industry is expected to further consolidate, as is the wider mining farm operating sector.
The Bitcoin (BTC) mining ASIC manufacturing industry is expected to further consolidate due to tightened competition, geopolitical pressures and slower returns on investment after Bitcoin’s recent halving.
In a new report from crypto derivatives exchange BitMEX, published June 15, researchers wrote they “think it is likely that only 2 to 3 players will survive into the longer term.”
The report analyzes the history and present state of the ASIC manufacturing industry, with a focus on the major players currently involved —- Bitmain, MicroBT, Canaan and Ebang.
ASIC refers to mining hardware that uses Application-Specific Integrated Circuit chips, which are tailored to efficiently mine cryptocurrencies based on a specific hashing algorithm.
By contrast, set-ups that use GPUs are less specialized, and have therefore to date struggled to compete for rewards on the network with those that deploy ASICs.
This has led to persistent concerns over centralization on various blockchains, due to the rising capital investment costs for prospective miners.
Consolidation among ASIC manufacturers themselves, as BitMEX’s analysis suggests, therefore implies increasing concentration at various levels of the industry.
Consolidation across the board?
Notably, BitMEX’s report expects that not only will ASIC manufacturing continue to consolidate, but the mining farm operating sector will as well.
In its earnings call Q&A session for Q1 2020, ASIC manufacturer Canaan reportedly revealed that:
“Even after the halving, we see more and more inquiries and they are in large amounts, large potential order inquiries. We