BIT Mining Boosts Profits by Shifting to Dogecoin and Litecoin Mining

Crypto mining company BIT Mining has reported a significant increase in its profitability by expanding its operations to mine Dogecoin (DOGE) and Litecoin (LTC), rather than focusing solely on Bitcoin (BTC). The company’s recent announcement on December 4 highlighted that its mining efforts for DOGE and LTC have proven to be nearly three times more profitable than its previous Bitcoin-only strategy.

Strategic Shift to Dogecoin and Litecoin

BIT Mining, which had primarily focused on Bitcoin mining, diversified into Dogecoin and Litecoin mining in May 2023. The company’s decision to expand its portfolio of mined coins has paid off, as mining DOGE and LTC has significantly outpaced Bitcoin in terms of profitability.

Up until November 27, 2023, BIT Mining mined 227,908,250 DOGE worth $94.8 million and 84,485 LTC valued at approximately $10.7 million. The company did not disclose how much of these coins it has retained, but the rise in the prices of DOGE and LTC, particularly during the last month, has likely contributed to the profitability of this shift.

As of the end of 2023, BIT Mining held 22.6 BTC, worth $2.2 million at the current market price.

The Role of Specialized Mining Equipment

One key factor in BIT Mining's success in DOGE and LTC mining is its investment in specialized LD3 mining machines. Acquired from Bee Computing in 2021, these machines are optimized for mining coins that use the Proof-of-Work (PoW) consensus algorithm, such as Dogecoin and Litecoin, allowing BIT Mining to tap into new, more profitable opportunities.

The company also credits its success to external factors, such as the influence of Elon Musk and the changing political landscape in the United States. The price surge in Dogecoin was partly fueled by Musk's comments surrounding his potential creation of a Department of Government Efficiency (DOGE) to advise President Donald Trump on cost-cutting measures. Musk’s influence on the market has been well-documented, and BIT Mining's Vice President and Chief Economist, Youwei Yang, noted that the regulatory shifts in the U.S. following Trump’s election victory also had a “major impact on mining profitability.”

Stock Performance and Mining Operations

Following the announcement of its profitable move into DOGE and LTC mining, BIT Mining’s stock surged by 10%, closing at $3.26 on the New York Stock Exchange on December 4. This was in contrast to other Bitcoin mining stocks, which rose between 3% and 7%, according to Google Finance. However, BIT Mining’s stock price has still seen a 37% decline year-to-date, continuing a long-term downward trend since the company's rebranding from 500.com in 2020.

BIT Mining now operates over 5,550 active mining machines, capable of mining Dogecoin, Litecoin, and Bellscoin (BEL), representing 1.32% of the total network hashrate for these coins. The company’s mining operations have diversified beyond just Bitcoin, indicating a broader trend of crypto miners diversifying their portfolios.

The Trend of Diversification in Mining

BIT Mining’s strategy of diversifying its mining activities mirrors broader trends within the industry. While some companies are exploring multiple coins, others, like CleanSpark and TeraWulf, have opted to focus exclusively on Bitcoin. Harry Sudock, Senior Vice President of CleanSpark, explained that the company prefers to stick with Bitcoin, citing the cryptocurrency’s “long track record” and their comfort with its long-term stability as key reasons for continuing to mine Bitcoin exclusively.

In contrast, MARA Holdings, a Bitcoin mining giant, also began mining Kaspa (KAS) tokens in September 2023, generating $16 million in revenue by June 2024, showcasing that diversification into other Proof-of-Work coins can be a lucrative option.

Controversy and Legal Issues

BIT Mining’s recent profitability gains come amid ongoing legal issues from its previous business activities. The company, which rebranded from 500.com, admitted to paying bribes to Japanese officials in an attempt to secure a resort and casino license between 2017 and 2019. In response to the charges, BIT Mining agreed to pay $10 million in fines to the U.S. government in November 2023 to resolve the matter.

Conclusion

BIT Mining’s shift to mining Dogecoin and Litecoin has proven to be a highly profitable strategy, with nearly three times the profits compared to its Bitcoin-focused operations. The success of this shift is largely attributed to the company’s use of specialized mining equipment and the market influence of figures like Elon Musk. As the company continues to expand its operations and diversify its portfolio, it stands to benefit from the growing popularity of altcoins, particularly in the Proof-of-Work space.

While BIT Mining’s stock has faced declines this year, its new mining ventures and growth in DOGE and LTC positions it to capitalize on the evolving crypto market. However, challenges, including ongoing legal issues, may impact its long-term growth and profitability. Despite these hurdles, BIT Mining’s expansion into multiple cryptocurrencies highlights the increasing trend of diversification within the mining industry.