February 23, 2024
Cryptocurrency Mining Market

Rising Demand For Cryptocurrencies To Fuel Growth In The Global Cryptocurrency Mining Market

The global Cryptocurrency Mining Market is estimated to be valued at US$ 4,305.60 Mn in 2023 and is expected to exhibit a CAGR of 7.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

Cryptocurrency mining refers to the process of verifying digital currency transactions and adding them to the blockchain using specialized hardware. Miners receive newly minted cryptocurrencies like bitcoin or ether as rewards for verifying transactions on the blockchain. Cryptocurrency mining involves high computing power for solving complex algorithms required for verifying transactions and releasing new coins. Cryptocurrency miners use customized hardware like graphics processing units (GPUs), application-specific integrated circuits (ASICs), and field-programmable gate arrays (FPGAs) for efficient mining. Rising demand for cryptocurrencies from investors is driving the need for miners and mining hardware and software across the globe.

Market key trends:

Growing acceptance of cryptocurrencies: Rising acceptance of cryptocurrencies like bitcoin among investors and merchants is a major growth driver for the mining market. As more people invest in cryptocurrencies and use them for payments, the need for miners validating transactions grows proportionately. According to a study, over 300,000 merchants worldwide accept cryptocurrency payments currently.

Advancements in mining technology: Continuous innovation and improvements in mining hardware is allowing miners to verify blocks faster. For instance, application-specific integrated circuits (ASICs) offered significantly higher hashes per second compared to earlier generations of GPU and FPGA miners. Leading manufacturers like Bitmain are consistently releasing new ASIC models with better performance and efficiency. These technological advancements are making mining more profitable and scalable.

Increasing institutional investments in mining: Large institutional investors and hedge funds are significantly increasing investments in cryptocurrency mining operations. Major players are raising large funding rounds to expand mining farms and increase hash power. For example, Hut 8 Mining Corp. raised over $100 million through private placement in 2021 to boost its bitcoin mining operations. Such heavy investments from institutions into mining farms are poised to propel market growth.

Porter’s Analysis

Threat of new entrants: The threat of new entrants in the cryptocurrency mining market is low due to the significant financial and technological investments required to set up hardware facilities and compete with established players.

Bargaining power of buyers: The bargaining power of buyers is high in this market as there are no switching costs involved for buyers to shift from one cryptocurrency to another.

Bargaining power of suppliers: The bargaining power of suppliers like chip manufacturers and hardware providers is moderate due to the presence of many established suppliers in the market.

Threat of new substitutes: The threat of substitutes is high due to the introduction of newer cryptocurrencies and alternative blockchain mining methods.

Competitive rivalry: Intense competition exists among the major players to gain market share.

Key Takeaways

The Global Cryptocurrency Mining Market Size is expected to witness high growth, exhibiting CAGR of 7.8% over the forecast period, due to increasing investments from institutional investors in cryptocurrency.

Regional analysis: North America dominates the global cryptocurrency mining market, with the largest share attributed to heavy investments from leading players in the US for large-scale cryptocurrency mining farms and facilities. Asia Pacific exhibits the fastest growth in the market attributed to low electricity costs and favorable government regulations in countries such as China, Japan and South Korea.

Key players operating in the cryptocurrency mining market are Bitmain Technologies, MicroBT, Canaan Creative, NVIDIA, AMD, Genesis Mining, Bitfury Group, Hut 8 Mining Corp., Riot Blockchain, Marathon Digital Holdings, Hive Blockchain Technologies. Key players are focusing on mergers and acquisitions to expand their global presence. For instance, in 2022, Marathon Digital Holdings acquired US-based bitcoin miner Whinstone to become one of the largest bitcoin mining and hosting facilities in North America.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it