Fundamental Labs, a blockchain fund manager that’s backed Binance, Coinbase and Canaan Creative, is investing $44 million in top-of-the-line bitcoin miners, a longer-term bet than most are making in the sector.
Revealed exclusively to CoinDesk, the Shanghai-based firm plans to run 20,000 to 30,000 units of brand-new mining equipment starting in June to capture on the cheap hydropower electricity during the rainy summer in China’s southwestern region.
“Mining is the fundamental block to support the whole crypto ecosystem. That’s why we invest in mining farms, equipment and pools and participate in mining ourselves,” Howard Yuan, managing partner of Fundamental Labs, told CoinDesk.
But unlike what most retail miners have been doing – buying second-hand miners ahead of the summer – Yuan’s firm is maximizing its mining scale by investing in the latest and most powerful equipment on the market, such as Bitmain’s AntMiner S17.
The unit price of these newest mining models made by manufacturers like Bitmain, InnoSilicon and MicroBT, ranges from $1,500 to $2,000 each, and will be ready for shipment in large quantities over the next two months.
“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,” Yuan said.
The capital for this investment comes from a 300 million yuan, or $44 million, mining fund that Fundamental Labs recently closed, which is the first phase of its overall plan to raise 1 billion yuan ($150 million) this year exclusively for further deployment in cryptocurrency mining.
Yuan said the firm was launched in 2016 with about $30 million of its proprietary capital, and has since then grown the total portfolio to over $500 million through five series of funds. Its holdings include an equity investment in Coinbase (which the U.S. crypto exchange confirmed to CoinDesk) and Binance’s BNB token. …