Chinese Bitcoin Mining Firm Bitmain Made $3 to $4 Billion in Profits Last Year, Says Analyst

February 24, 2018, 4:45 PM UTC

Bitmain, a privately held Chinese firm that manufactures Bitcoin mining hardware and runs its own mining operations, made $3 billion to $4 billion in profits in 2017, according to estimates by Bernstein Research released this week.

Bitmain manufactures specialized hardware that performs the cryptographic functions that ensure the security of cryptocurrencies including Bitcoin. According to CNBC, Bernstein found that Bitmain adjusted the price of its hardware as the price of Bitcoin rose, increasing its profits. Bitmain pioneered the creation of specialized chips for cryptocurrency mining, known as asics, and Bernstein estimated it currently has 70 to 80 percent of the market for Bitcoin mining hardware.

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Bitmain also profited directly from the rising price of Bitcoin, which peaked at close to $20,000 last December. According to current data from, Bitmain’s Antpool and mining pools make up just over 40% of the computing power on the network of servers that maintain and secure Bitcoin’s distributed transaction ledger, or blockchain. The operators of those servers are intermittently rewarded in cryptocurrency, though Bitmain doesn’t collect all of those proceeds. Mining pools, as the name suggests, are alliances of server operators who agree to share mining rewards to guarantee steadier returns. Bitmain collects fees in Bitcoin from server operators who join its pools.

Bitcoin’s price has declined by around half since its December peak, and the highly volatile nature of the nascent cryptocurrency sector means Bitmain’s continued profits and dominance are far from guaranteed. A particular risk for the company is the Chinese government, which has recently taken firm steps to constrain cryptocurrency activity. However, Bitmain is cushioned by what the Bernstein report describes as a “massive cash position,” and last year announced it was diversifying into chips designed for artificial intelligence.