While Bitcoin is still down by over 50% from its all-time high and down some 40% since the $14,000 top put in in the middle of 2019, institutions continue to trickle into the cryptocurrency industry.
Reports have revealed that two massive Japanese corporations that have shown interest in blockchain-related ventures previously will soon begin mining Bitcoin in Rockdale, Texas, where there exist some of the “world’s largest crypto mines,” reports say.
Analysts say that moves into the cryptocurrency space like the aforementioned bode well for the long-term trajectory of this nascent market.
SBI Holdings & GMO Internet Want to Mine Bitcoin
According to a recent report from Bloomberg published on January 7th, SBI Holdings — a financial services company group based in Tokyo, Japan that works closely with crypto-centric fintech upstart Ripple — and GMO Internet, an internet service provider that has been mining cryptocurrency for multiple quarters now, has entered an agreement with Nothern Bitcoin AG subsidiary Whinstone Inc.
This agreement, revealed by individuals familiar with the matter who requested anonymity in discussion with Bloomberg, means that the two firms will start mining Bitcoin at Whinstone’s facilities in Rockdale, Texas “within the coming months.
Whinstone’s parent company, Northern Bitcoin, has said that their Rockdale-based facility will have a mining capacity of 1 gigawatt by the end of 2020, purportedly three times larger than that of Bitmain’s Rockdale mine, which currently holds the title for the world’s largest crypto mine.
The choice of Texas for these new mines instead of, say, Western Canada or Iceland purportedly stems from the American state’s history of independence and abundance of cheap and renewable energy sources, Bloomberg senior commodities strategist Mike Mcglone was quoted as saying in the aforementioned report.
Not the Only Corporation Mining Bitcoin
SBI Holdings and GMO Internet are the latest mainstream firms to have delved into Bitcoin mining.
Per previous reports from Blockonomi, Blockstream, a Bitcoin infrastructure development company working on projects like the Lightning Network and the Liquid Network, in August unveiled a “mining equipment colocation” division.
This new facet of their business promotes institutional and enterprise customers” to deploy “virtually any type of Bitcoin mining equipment” in any of Blockstream’s centers.
According to the press release unveiling this new branch, Fidelity Investments — a Wall Street financial services company that has literal trillions of dollars worth of assets under management and has its own crypto division — is currently making use of Blockstream’s new service.
The extent of Fidelity’s operations isn’t clear, though Forbes contributor Kyle Torpey has suggested that Blockstream’s centers have the potential to power 7.5% of the Bitcoin network at full capacity with the latest ASIC models.
🚨🚨🚨@Blockstream has revealed they've gotten into the Bitcoin mining business.
They have 2 massive mining facilities in Quebec and the state of Georgia with a combined 300 MW of energy capacity.
Could power 7.5% of the network hashrate at full capacity with latest ASICs. https://t.co/SZTE1oWbBu
— Kyle Torpey (@kyletorpey) August 8, 2019
Bodes Well For Crypto Market
The entrance of SBI, GMO, and Fidelity into the Bitcoin mining industry seemingly bodes well for the underlying cryptocurrency market.
Firstly, it confirms that the so-called “miner capitulation” — when Bitcoin and other cryptocurrency miners stop their operations due to operating expenses being unsustainable — is over. Previous conclusions to bouts of miner capitulation have historically marked macro bottoms in the Bitcoin market and preceded bull rallies that had an average 5,000% gain, according to an analysis by digital asset manager Charles Edwards.
And secondly, it confirms that capital is being allocated to this space. Changpeng “CZ” Zhao, chief executive of Binance, was quoted as saying that the “increasing amount of interest from institutional players which also indicates a more bullish market in 2020.”