Bitmain Chairman and CEO Jihan Wu has announced a few interesting changes to Bitmain’s client sales strategies aimed at fixing its receding market dominance.
Chinese crypto mining giant Bitmain has announced a few changes to its current sales methods that are geared at improving profits for the company but also making things a lot easier for its many customers. Bitmain recently lost some part of its market share as well and has decided to make these moves as a way to rectify its market recession.
The announcement was made by Jihan Wu who is now Bitmain’s only chairman and CEO after the unceremonious exit of Micree Zhan recently. Speaking at an event hosted for customers in China’s Chengdu city on Saturday, Wu said that Bitmain was ready to take a few new risks on behalf of its customers and partners, to help their respective businesses. Wu announced three major changes.
Before now, Bitmain’s style was to receive total payment for any of its Bitcoin mining equipment being purchased by a client or partner, before shipment. Now, the company will let clients make part payments over some time, somewhat allowing these customers to lock down the equipment until payment is complete. Wu said at the event that any clients that are looking to pre-order between 100 and 999 miners will be allowed to make an initial payment of 50%. This rate reduces to 20% for bigger clients that look to purchase 5,000 miners or more. For both categories, however, payments must be completed at least seven days before shipping. This will allow customers to share the financial burden with Bitmain however temporarily.
The second major adjustment allows Bitmain to lend a helping hand to operators of mining farms that might not be able to make outright purchases of the equipment they need. Wu explained that Bitmain will enter an agreement with these operators which will allow them to rent the AntMiner S17 or T17 and could also handle power charges of 0.35 yuan ($0.05) per kilowatt-hour. The operators would, however, have to handle the maintenance of the equipment. The deal states that Bitmain will take 75% of all the profits and the rest will remain with the owners. The catch here, however, is that this only works if the profits are more than the power charges already paid by Bitmain. If they aren’t, Bitmain will take all of the coins produced.
The third adjustment involves put options that could significantly benefit investors if things go right. Basically, clients who are willing to spend $1.5 million on AntMiner S17 Pros – about 1,000 units – will receive 62 put options which will be about 1% of their initial order. According to the deal, these clients will be able to sell Bitcoin for 35,000 Yuan ($5,000) by the 27th of March. If prices go below 35,000 Yuan by then, customers will be able to pull in profits, depending on how much the price swings.
The company hopes these moves will go a long way to ensure that Bitmain retains its position in the mining market, stemming from competition as much as possible.