Bitmain: The Covert Titan of Self-Mining, Dominating BitFuFu’s Operations

Bitmain, the world’s leading bitcoin mining hardware manufacturer, is not just a supplier but also a formidable competitor in the mining sector, a recent investigation by TheMinerMag reveals. Bitmain’s influence extends far beyond its role as a minority shareholder in the BitFuFu mining company, with recent filings indicating that Bitmain effectively controls a significant portion of BitFuFu’s operations.

In the first half of 2023, BitFuFu, backed by Bitmain, operated primarily in two domains: proprietary mining and cloud mining, managing about 15 Exahash per second (EH/s) of hashrate. The majority of this hashrate originated from S19XP miners rented from Bitmain. Furthermore, Bitmain provided the necessary hosting capacities across various US states and other countries, enabling BitFuFu to deploy its hashrate efficiently.

This relationship resulted in nearly 65% of BitFuFu’s cloud mining and self-mining revenues in the first half of 2023 flowing directly into Bitmain’s coffers. Additionally, about 80% of BitFuFu’s cost of revenues, net of depreciation and amortization during this period, was paid to Bitmain. Essentially, BitFuFu’s business model is so intertwined with Bitmain that it appears Bitmain virtually owns the company, despite officially holding only a 5% stake.

Bitmain’s recent hosting deal with Core Scientific for an additional 4.1 EH/s suggests that Bitmain and BitFuFu collectively operate at least 20 EH/s of mining capacity. This partnership highlights Bitmain’s strategic positioning, not just as a hardware manufacturer, but as a key player in the global Bitcoin mining industry, exerting significant influence over the mining operations and revenues of companies it partners with.