Its latest company report published this week confirmed that the GMO group suffered losses of JPY 1.3 billion (USD 12 million) in 2018, mainly due to a drop in cryptocurrency mining activity.
A company spokesman for the Japanese company which supports internet infrastructure, internet finance, and cryptocurrency mining business, put the down the losses to the declining price of Bitcoin in 2018 along with a depreciation in the cost of mining machines.
The main outcome of the company’s losses has resulted in a rethink in how GMO adjusts its business policy moving forward. A problem in 2018 had been the purchase of expensive mining machines from other manufacturers, which led to decreased profitability. This was due to a delay in procurement of part of the electronic components, which led to the postponement of development and manufacture of mining machines.
The company has now decided to relocate its mining center elsewhere in Japan in order to obtain a cleaner and more financially viable power supply. In December 2018, GMO had indicated that it would be closing down its mining operations with predicted losses of JPY 35.5 billion due to quitting the development, manufacture, and sales of mining equipment.
GMO said:
“The electricity cost in the new location, which is confidential, is less than half of that in Northern Europe, which is 7-8 cents per kWh including running costs. We believe the relocation will impact our earnings this summer.”
With further losses announced this week, it is unclear exactly how GMO will progress in the cryptocurrency space moving forward into the long term.
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