Crypto mining company BIT Mining has significantly boosted its profit margins by diversifying into mining Dogecoin (DOGE) and Litecoin (LTC), earning nearly three times more than it did mining Bitcoin (BTC) alone. This shift, supported by specialized mining equipment, highlights the profitability of alternative proof-of-work cryptocurrencies.
Diversifying Mining Operations
Since launching its DOGE and LTC mining operations in May 2023, BIT Mining has achieved remarkable results. As of Nov. 27, the company mined:
- 227,908,250 DOGE, valued at $94.8 million
- 84,485 LTC, worth $10.7 million
The company attributed its success to the use of LD3 mining machines, acquired from Bee Computing in 2021. These specialized machines are optimized for mining DOGE and LTC, which operate on the same Scrypt algorithm.
While BIT Mining hasn’t disclosed how much DOGE or LTC it retained, both cryptocurrencies have seen significant price increases in recent months. By comparison, the firm reported holding only 22.6 BTC, valued at $2.2 million at the end of 2023.
Boost from Market Trends
BIT Mining’s profitability also benefitted from recent market developments. Dogecoin’s price surge was partly driven by Elon Musk’s promise to create a “Department of Government Efficiency” (DOGE) as an advisory role under Donald Trump’s administration.
The company’s vice president, Dr. Youwei Yang, noted that Musk’s influence and changing US regulations under the Trump administration have positively impacted mining profitability.
Market Performance and Industry Context
BIT Mining’s stock (BTCM) rallied 10% on Dec. 4, closing at $3.26 on the New York Stock Exchange, with an additional 2.15% increase in after-hours trading. Despite this, the company’s shares remain down 37% year-to-date, continuing a long-term decline since 2014.
In addition to DOGE and LTC, BIT Mining’s 5,550 active mining machines also mine Bellscoin (BEL), contributing 1.32% of the total hashrate for all three coins. This makes the company one of the largest participants in these networks.
The Case for Diversification
BIT Mining isn’t the only firm exploring diversification beyond Bitcoin. Rival Marathon Digital recently began mining Kaspa tokens, generating $16 million by mid-2023. However, some companies remain focused solely on Bitcoin.
CleanSpark and TeraWulf, for example, have no plans to mine other proof-of-work coins, citing Bitcoin’s long track record as a reliable investment. CleanSpark’s senior vice president Harry Sudock explained, “Bitcoin’s history makes it a safer long-term bet.”
Legal Challenges
BIT Mining’s success comes against the backdrop of legal issues tied to its previous operations as an online sports lottery firm, 500.com. The company admitted to bribing Japanese officials to secure a casino license between 2017 and 2019. On Nov. 18, it agreed to pay $10 million in fines to the US government to settle the charges.
