Wall Street Analyst Claims Bitmain Developed An ASIC To Mine Ethereum

  • A Wall Street analyst recently claimed Bitmain developed an ASIC to mine Ethereum. He added that three other firms are developing ASICs for the cryptocurrency
  • This type of competition saw him alter his AMd and Nvidia stock price predictions

Wall Street firm Susquehanna recently reduced its price targets for leading GPU makers AMD and Nvidia, claiming they’ll now have to compete with mining hardware giant Bitmain when it comes to cryptocurrency mining, as the company developed Ethereum ASIC miners.

In a note sent to Susquehanna’s clients, analyst Christopher Rolland revealed the China-based hardware manufacturer, a market leader when it comes to Application Specific Integrated Circuit (ASIC) chips, is going to start shipping out Ethereum ASIC miners in the second quarter of this year.

According to CNBC, he said:

"During our travels through Asia last week, we confirmed that Bitmain has already developed an ASIC [application-specific integrated circuit] for mining Ethereum, and is readying the supply chain for shipments in 2Q18.”

Christopher Rolland

He further revealed that while Bitmain is the largest ASIC vendor, currently selling 70 to 80 percent of Bitcoin mining ASICs, and the first to market these chips, three other companies are working on Ethereum ASICs.

So far, Ethereum’s hashing algorithm Ethash has been ASIC-resistant, allowing miners to make a profit using general purpose GPU chips commonly used for gaming and looking for aliens. ASIC chips are extremely efficient at mining cryptocurrencies, but are useful for little else.

Rolland lowered his stock price targets for GPU makers Nvidia and AMD as he believes ASICs will hurt demand for these chips, which will in turn hurt their business. He estimates Ethereum mining-related sales account for 20 percent of AMD’s sales, and 10 percent of Nvidia’s revenue.

Even if miners stop buying GPUs to mine Ethereum, it’ll still be profitable to buy them to mine other cryptocurrencies. One example would be Monero (XMR), which recently went to “war” against ASICs through an emergency software update that “lightly changes the proof-of-work algorithm to prevent DoS attacks by ASICs.”

Nevertheless, Susquehanna reduced his price target for AMD’s shares from $13 to $7.5, and reduce his forecast for Nvidia from $215 to $200. Per the analyst, Nvidia has a “stronger and more durable gaming franchise which would could help it work through this potential Ethereum-related unwind.”

Last year, Bitmain reportedly made as much revenue as Nvidia. The company’s revenue, analysts estimate, is generated by selling ASICs. The company may be expanding by developing operations in the US

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Coinbase Quietly Pulls the Plug on Its Cryptocurrency Bundle Product

Francisco Memoria

The San Francisco-based cryptocurrency exchange Coinbase has quietly pulled the plug on its Bundle product, which allowed users to buy a basket of cryptocurrencies with fiat.

According to an update on its FAQ page, the cryptocurrency exchange “deprecated” the Coinbase Bundle product, and all assets in it have been “redistributed to their respective individual asset wallets.”

The move, first spotted by Crypto Briefing, is believed to have been made because the product wasn’t a profitable one. Coinbase Bundle was launched back in September of last year to make it easier for investors to gain exposure to the cryptocurrency ecosystem, through a weighted basket of the cryptocurrencies the company then offered.

This means users could use a small amount of fiat to buy bitcoin, litecoin, ethereum, bitcoin cash, and ethereum classic at once. Per the exchange itself, the bundle’s purpose was to “make buying more convenient and less overwhelming.”

At the time, the exchange also launched other features: Coinbase Learn and new asset pages.

The timing was off, however, as the product was launched during the bear market that saw the price of most cryptocurrencies drop well over 80%. Images shared on social media in December of 2018, when bitcoin hit its $3,200 low, showed investing $100 on Coinbase would’ve led to significant losses only a few months later.

As covered, Coinbase recently launched a service offering its users four free exclusive “trading signals,” in a bid to help its customers “independently create and manage their own crypto strategy.”

It’s worth noting Abra, a digital asset exchange and wallet provider,  launched a product packaging various cryptocurrencies into one at about the same time Coinbase launched its Bundle product. Abra’s product is its BIT10 token.