Leo Lu, Chairman and CEO of BitFuFu Inc. FUFU, was recently interviewed by Benzinga. BitFuFu is a Bitcoin miner and cloud mining provider. It is a world leader as a hashpower provider, and the company says it is one of the largest in the world and is growing rapidly. Last quarter saw it pull in nearly $130 million in revenue, up about 70% year over year. Mr. Lu spoke about the exciting opportunities that lie ahead for BitFuFu.
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00:00Welcome, Benzinga Nation. We've got a great guest lined up for today. It's Mr. Lu, who's the chairman and CEO of BitFufu.
00:09Ticker on the NASDAQ is FUFU. Mr. Lu, welcome to the show.
00:13Thank you. My God.
00:16You know, crypto is always a fun, fun conversation for me to have. But before we dive into the nitty gritty aspect,
00:21can you please tell me a brief overview of what is it that BitFufu does?
00:26Of course. Let me give you a brief introduction about BitFufu. We are a tax-driven mining company.
00:33We mine Bitcoin for ourselves and also offer cloud mining services to clients for their Bitcoin mining.
00:40When providing cloud mining services, our self-developed system manages and allocates computing power to customers,
00:49enabling customers to buy any amount of hash power for any period and making Bitcoin mining easier. That's about it.
00:59You know, cloud mining is always interesting to me, and I'll get to that here in a second.
01:03But you've had great success. You've grown very quickly, achieving rapid growth ever since your inception.
01:09Can you tell me the reasons for such type of performance? Like, what are FUFU's core competencies?
01:16Sure. BitFufu's revenue started from $100,000 million in 2021 to $198 million in 2022 and hit $284 million in 2023,
01:37which was 66% CAGR. In the first half of 2024 alone, we already reached $274 million, nearly matching last year's total.
01:54In addition, we've been profitable since 2021, with 2024 H1 net profit exceeding $36 million.
02:08Our rapid growth stems from a couple of reasons. First is we operate in a booming market.
02:18Bitcoin has gained significant recognition as a crucial asset, with its market capitalization doubling in the past three years.
02:30We have a highly skilled and motivated team. Our technical team with a proprietary system and patterns,
02:40combined with our experienced operations and sales teams, quickly seized a market opportunity.
02:47My background in computer science and experience as a business director at Bitmain also contributed to our success.
02:58In addition, the rapid growth also contributed to our core strengths, including our business model combining self-mining and cloud mining.
03:11We are the top player in the market of cloud mining in terms of revenue scales.
03:18We have cutting-edge technology, including our self-developed Aladin system, overclocking technology, and a mining machine management system.
03:30Those technologies enable us to provide stable cloud mining services to customers, enhance our management efficiency on machines, and boost our self-mining revenue.
03:46We have strong industry resources, support, and strategic investment from Bitmain and Ample, allowing us to scale rapidly using an asset-light strategy, increasing revenue without having a set risk.
04:05And that's where we stand.
04:07Especially in the crypto space, you want to make sure that your risk is managed well.
04:11The key takeaway for me there was profitability since 2021. That is huge and exciting to hear as well.
04:17Now, among publicly traded Bitcoin mining firms, people are familiar with self-mining companies, but not so much when it comes to cloud mining businesses as well.
04:27Who will be cloud mining's, say, customers? What is the value of cloud mining to those customers?
04:33And more importantly, why don't customers just buy mining machines themselves?
04:38Good question. Our clients include individual miners, high-net-worth individuals, family offices, private equity funds, crypto exchanges, and publicly listed companies investing in Bitcoin and so on.
04:57The benefits of cloud mining for our clients include several aspects.
05:04First of all, it makes Bitcoin mining easier. Cloud mining removes all the hassles of buying and operating mining equipment.
05:14Clients do not need to worry about procurement, transportation, customers, contracts, deploy, and maintenance.
05:26Second, that is lower entry costs. Clients avoid the high upfront costs of buying mining equipment, making it easier to start.
05:39Third, as mining becomes more centralized and institutionalized, cloud mining opens the door for regular users to participate in Bitcoin mining in just a click.
05:54This can boost interest in Bitcoin and its market impact.
06:00In addition, cloud mining often costs less than buying Bitcoin on exchanges.
06:07Clients typically could save 3% to 20% to acquire Bitcoin especially.
06:16Clients can use leverage by paying fees in installments, potentially increasing their returns.
06:24Another benefit is that cloud mining offers more stability with guaranteed uptime, avoiding risks like equipment failure and performance issues.
06:40Last but not least, clients can start to mine at any time and choose the duration of their cloud mining solution freely, reducing locking risks compared to traditional mining.
06:56That should answer your questions.
06:59Yeah, you know, the biggest thing is let's not pretend like GPUs are easy to purchase and install in terms of hardware.
07:04So you definitely save some headache for the other end user for that.
07:08Now, you mentioned margin.
07:09So let me ask you, how will BitFufu remain profitable and competitive as well in the future after the halving event?
07:15BitFufu's revenue started from $100 million in 2021 to $198 million in 2022 and hit $284 million in 2023, which was a 66% CAGR.
07:35In the first half of 2024 alone, we've already reached $274 million, nearly matching last year's total.
07:46In addition, we've been profitable since 2021 with a 2024 H1 net profit exceeding $36 million.
08:01Our rapid growth stems from a couple of reasons.
08:05We operate in a booming market.
08:08Bitcoin has gained significant recognition as a crucial asset, with its market capitalization doubling in the past three years.
08:21We have a highly skilled and motivated team.
08:24Our technical team with proprietary systems and patents combined with our experienced operations and sales teams quickly seized marketing opportunities.
08:40Also, my background in computer science and experience as a business director at Bitmain also contributed to our success.
08:50In addition, the rapid growth has also contributed to our core strengths, including our business model combining self-mining and cloud mining.
09:02I know we are the top player in the market of cloud mining in terms of the revenue scales.
09:08We have cutting-edge technology, including our self-developed Aladin system, overclocking technology, and a mining machine management system.
09:21Those technologies enable us to provide stable cloud mining services to customers, enhance our management efficiency on machines, and boost our self-mining revenue.
09:36We have strong industry resources.
09:40Support and strategic investments from Bitmain and Ampool allow us to scale rapidly using an asset-light strategy, increasing revenue without having set risks.
09:57And that's where we stand.
10:01You know, so far we've talked about the 2021 profitability aspect, we've talked about your rapid growth, but I want to talk about the future.
10:08So, last question for me is, what does the future growth of the business, a strategy look like for the viewers that are watching?
10:17Looking ahead three to five years, we will expand both vertically and horizontally.
10:25In terms of a self-mining business, we will grow across the mining industry chain by expanding hosting capacity and mining capacity.
10:36As mentioned before, through vertical integration, we will acquire or partner with mining firms worldwide to lower costs and boosting hosting revenue.
10:50In terms of a cloud mining business, we will expand to new areas.
10:56We will focus on the regions where we currently have low penetration.
11:01Our goal is to attract more customers who are passionate about Bitcoin, but face high entry barriers.
11:11We will also diversify our product offering to make mining more accessible, catering to different risk levels.
11:21Moreover, as our cloud mining platform grows and accumulates more and more users, we will explore new services within the digital currency ecosystem to create more revenue streams.
11:38That would be very interesting and we are ready to study potential directions.
11:45That's our strategy of the business.
11:47Thank you for asking.
11:49Yeah, of course, and I appreciate your time here today to go over what you've done, what you're doing, and what the future can look like as well.
11:57I really appreciate your time here today.