Fundamental Labs is set to expand its crypto mining operation by investing $44 million to buy Bitcoin mining devices, Coindesk reported on May 9.
The report outlined that the Shanghai-based fund aims to deploy 20,000 to 30,000 new mining devices next month in the southwestern region of China to profit from the cheap hydro-powered electricity in the monsoon season.
The firm is aiming to add flagship miners from manufacturers like Bitmain, InnoSilicon, and MicroBT to its arsenal. Unlike most crypto mining companies, Fundamental Labs will invest in brand new mining devices to scale up its operations. Each device will cost the company between $1,500 to $2,000.
“We don’t buy old machines since our focus is to participate in mining for the long term. And second-hand equipment like AntMiner S9 won’t be useful once the summer season ends,” Howard Yuan, managing partner at Fundamental Labs, told the publication.
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The Chinese company is one of the big names among crypto-focused fund managers. Its investment portfolio includes major crypto ventures like Binance, Coinbase, Canaan Creative, VeChain, EOS, and many more.
The investment to expand its mining operation will come from the company’s new mining-specific fund which was recently closed at ¥300 million (around $44 million). This company is aiming to raise up to ¥1 billion ($150 million) this year to boost its crypto mining activities in the country.
Cheap Chinese electricity
Fundamental Labs is not the only mining company aiming to gain from the cheap electricity costs in the region as the miner-manufacturer Bitmain is also planning to deploy around 200,000 miners from its inventory to revamp its Bitcoin mining activities.
Meanwhile, Bitmain recently disclosed that the hash rate generated by the company’s BTC mining operation dropped by 88 percent in the last 30 days to 237.29 PH/s.
The BTC price rally in 2017 has attracted many major players including large corporations towards crypto mining; however, the sector lost its lucrativeness as the prices began to slump in 2018. As the digital currency is again moving strongly above $6,300 a piece, mining might again be a safe business to bet.