Japanese e-commerce giant DMM, which reportedly has over 27 million clients for its e-commerce business, is reportedly shutting down its cryptocurrency mining business over “deteriorating profitability.”
According to local news outlet Toyo Keizai “deteriorating profitability” is the main cause, which implies there may be more. DMM’s withdrawal process is set to unfold during the first half of this year, in which it’ll be selling its mining equipment.
Speaking to The Nikkei, the founder of DMM’s mining sector Keishi Kameyama reportedly noted that going forward the company is set to focus on its “exchange [platform] and blockchains.” Notably. DMM has launched a cryptocurrency exchange DMM Bitcoin, which is one of the 16 regulated crypto exchanges in Japan.
The withdrawal process such as the sale of the machines will go over to the first half of 2019.
The firm’s cryptocurrency mining operation was announced back in September of last year, when it revealed it was setting up a farm in the city of Kanazawa a month later. Its operations focused on mining top cryptocurrencies, including BTC, LTC and ETH.
According to some DMM was already revealing hesitancy towards the cryptocurrency industry, as last week it announced its cryptocurrency trading app Cointap wouldn’t be launched as planned. This, as to the firm the ongoing bear market means it may not be a good idea to attract new traders to the industry.
Notably DMM isn’t the first major firm to exit the cryptocurrency mining business. As CryptoGlobe covered, GMO Internet has revealed it’ll be pulling the plug on its cryptocurrency mining business after enduring a huge loss last year.
The firm noted it would be difficult to recover “the carrying amounts of the in-house-mining-related business assets, and therefore, it has been decided to record an extraordinary loss.” Last year’s bear market, which saw the price of most cryptocurrency drop between 80% and 90%, was behind these decisions as bitcoin itself went from a near $20,000 to a $3,200 low before it started recovering.
The decline saw miners pull the plug on their operations, which in turn saw bitcoin’s hashrate plummet. Notably BTC’s recent recovery to a high above the $4,000 mark saw its difficulty adjust 10% upward. At press time, bitcoin is trading at $3,890.