As the world’s largest cryptocurrency exchange by trading volume, Binance will continue its foray into the beleaguered cryptocurrency mining industry, with plans to launch a cloud mining product next month.
Crypto miners have had a difficult year, with the price of bitcoin hovering around $20,000 for many months, a far cry from its high above $68,000 in November 2021. Many other cryptos have also faced similar or worse declines. One of the largest mining-related businesses in the U.S. filed for bankruptcy in late September.
Other companies, however, are seizing this opportunity, with CleanSpark going on a buying spree of mining rigs and data centers and decentralized finance (DeFi) platform Maple Finance starting a $300 million lending pool.
Binance announced its own $500 million lending fund for bitcoin miners last week and said it would be launching a cloud mining service in exchange for investors who otherwise may not be able to invest in and operate their own equipment . The official launch of the cloud mining service will come in November, Binance told CoinDesk via email.
This is a developing rivalry with Jihan Wu’s Bitdeer, a cloud mining enterprise that also established a $250 million fund to obtain distressed assets the week after. Jihan Wu is the ousted co-founder of Bitmain, the world’s largest manufacturer of crypto mining machines. Another significant player in the cloud-mining market is BitFuFu, backed by Bitmain’s other founder, Ketuan Zhan.
BitDeer and BitFu sell a mix of their own and others’ hashrate, or computing power. In its blog post announcing its entry into the business, Binance Pool announced it would source hashrate from third parties, indicating that it would not be operating its own infrastructure.
Binance Pool will not only function as a mining pool but will also take responsibility for contributing to building a healthy industry, especially during an uncertain market environment.
Post time: Oct-19-2022