Japan E-commerce Giant, DMM, Shuts Down Cryptocurrency Mining Activities Due to Low Profits

Japan E-commerce Giant, DMM, Shuts Down Cryptocurrency Mining Activities Due to Low Profits

Local newspaper Toyo Keizai reported on December 30 that the Japanese company DMM shuts down its activities in cryptocurrency mining due to low profitability. Earlier in September 2018, it had decided upon this move and taken the initial steps to discontinue mining operations. To this end, they had put the mining hardware up for sale, and this process will be carried on to the first half of 2019.

DMM which had over 27 million customers, announced its launch into the cryptocurrency mining business in September 2017. It was mining major cryptocurrencies such as Bitcoin, Ethereum and Litecoin. It has conducted large-scale mining activities in the city of Kanazawa since February this year. DMM even had plans to open a showroom in April this year. The company intended to unveil its mining operations for the public so that the people could see 1000 mining machines operating on a 500 square meter site. Then, in June, this project was canceled due to security concerns, especially because of probable occurrence of theft which had happened before in this company.

According to Toyo Keizai, DMM was considering the launch of a cryptocurrency trading App called “Cointap,” which had been set to be released on December 25, 2018. There have been no reports indicating that DMM will completely cease its cryptocurrency trading activities. After its announcement regarding the shutdown of its cryptocurrency mining activities, this company still has an ongoing cryptocurrency trading business. As was reported earlier, the giant GMO Internet Group has recently announced it will no longer manufacture Bitcoin miners. This company had sustained numerous losses in the fourth quarter of 2018. Meanwhile, it was reported in China that many are selling their mining hardware, and that big mining companies such as Bitmain are going to cease their activities. The reason is the volatilities and reduction in Bitcoin price.

Cryptocurrency exchanges had become an influential business for Japan economy in the last year because of the introduction of a licensing schema that made a lot of people invest in this area. In December 2017, cryptocurrency exchanges added 0.3 percent to GDP in Japan.

It’s hard to comment on what future holds with all the news about the shutdown of companies involved in cryptocurrency mining. What’s clear is that there is still hope to revive the cryptocurrency market. It seems more probable that the Bitcoin market and its mining industry will get worse before getting better.