Bitmain's Strategic Expansion via Public Shells: A New Era for Proprietary Mining Dominance

The Bitcoin mining landscape in 2025 is defined by a seismic shift in capital efficiency and operational strategy, with Bitmain's public shell approach-leveraging entities like NIP Group and Cango-emerging as a dominant force. By combining cutting-edge hardware innovation, aggressive cost control, and diversified revenue streams, Bitmain has redefined the economics of mining, outpacing traditional operators and positioning itself as a cornerstone of the industry's next phase. This analysis explores how Bitmain's strategic use of public vehicles has enabled rapid hashrate scaling, superior cost per terahash (TH) metrics, and a structural advantage over legacy miners, making it a compelling investment thesis in an increasingly fragmented market.

The Bitmain Public Shell Model: A Blueprint for Scalability

Bitmain's strategy hinges on deploying its proprietary hardware through publicly traded partners, allowing it to bypass the capital-intensive hurdles of direct infrastructure ownership while capturing market share. NIP Group and Cango exemplify this model. By December 2025, NIP Group had expanded its hashrate to 11.3 EH/s, achieved through acquisitions of 8.19 EH/s of infrastructure from third parties. Similarly, Cango's operations surged to 50 EH/s, with daily Bitcoin production pushing its holdings above 7,500 BTC. These figures underscore the velocity of Bitmain's expansion, facilitated by its ability to integrate hardware, hosting, and power solutions into a single, scalable ecosystem.

The key to this success lies in Bitmain's hardware innovation. The Antminer S23 Hydro, with an efficiency of 9.5 J/TH, remains one of the most energy-efficient miners on the market. By bundling these rigs with hosting services at prices as low as $4/TH in late 2025, Bitmain not only reduced entry barriers for partners but also locked in long-term operational advantages. This approach contrasts sharply with traditional miners, who often rely on older, less efficient hardware and face higher per-TH costs. For instance, NIP Group's cost per TH in Q3 2025 was estimated at $38,800, significantly lower than Marathon Digital's $67,700. Such disparities highlight Bitmain's ability to compress costs through vertical integration and economies of scale.

Cost Efficiency and Profit Margins: A Structural Edge

The profitability of Bitmain-linked entities is further amplified by their strategic pivot into AI and high-performance computing (HPC). Cango, for example, secured a $10.5 million investment to develop an energy-efficient AI compute platform, while NIP Group's CEO emphasized integrating gaming, AI, and blockchain to diversify revenue streams. This dual-use infrastructure model-leveraging existing data centers for both Bitcoin mining and AI workloads-has proven critical in an environment where Bitcoin's profitability is volatile.

Traditional miners, by contrast, face a "harsh profitability crisis." In Q3 2025, the average direct cash cost to mine a Bitcoin at public miners was $74,600, with all-in costs reaching $137,800. Meanwhile, the hashprice-the daily revenue per petahash-dropped to $35/PH/s by December 2025, leaving many operators near breakeven. Bitmain's public shells, however, have maintained healthier margins. Cango's Q1 2025 performance achieved industry-leading productivity of 16.6 Bitcoin mined per EH/s, while NIP Group's $14 million quarterly Bitcoin harvest demonstrated resilience despite rising network difficulty.

Equity-Driven Scaling: A Superior Investment Framework

Bitmain's public shell strategy also capitalizes on equity-driven scaling, a model that prioritizes rapid growth through public market financing rather than debt-laden capital expenditures. NIP Group's acquisition of 3.11 EH/s of mining assets in Q3 2025, expected to produce 60 BTC/month, illustrates this approach. By leveraging public equity to fund expansion, Bitmain-linked entities avoid the liquidity constraints that plague traditional miners, who often rely on high-interest loans or asset sales to fund operations.

This model's advantages are compounded by Bitmain's auction-based pricing strategy for mining rigs, introduced in late 2025 to stimulate demand during a downturn. By allowing miners to bid on hardware, Bitmain not only accelerated adoption of its S21 series but also created a feedback loop where increased hashrate deployment further drives down per-TH costs. For investors, this dynamic represents a flywheel effect: lower costs enable higher margins, which fund further expansion, reinforcing Bitmain's dominance.

Investment Implications: Why Bitmain's Model Outperforms

The structural advantages of Bitmain's public shell strategy are clear. First, its vertically integrated approach-combining hardware, hosting, and AI-creates a moat against competitors. Second, the cost per TH metrics of Bitmain-linked entities ($38,800 for NIP Group) far outperform traditional miners, ensuring higher profit margins even in bearish conditions. Third, the equity-driven scaling model reduces financial risk, as public financing cushions against the volatility of Bitcoin's price cycles.

For investors, this translates to a compelling risk-reward profile. While traditional miners like Marathon Digital and Bitdeer have seen stock declines of 46% and 48% in 2025 due to operational setbacks, hybrid operators with AI contracts-such as IREN and Cipher-posted triple-digit returns. Bitmain's public shells, with their diversified revenue streams and cost advantages, are well-positioned to replicate this success.

Conclusion

Bitmain's strategic expansion via public shells marks a paradigm shift in Bitcoin mining. By leveraging cutting-edge hardware, aggressive cost control, and diversified revenue streams, it has created a model that outpaces traditional operators in both efficiency and scalability. As the industry grapples with rising difficulty and energy costs, Bitmain's public shell strategy offers a blueprint for sustainable growth-one that prioritizes capital efficiency, operational flexibility, and long-term profitability. For investors, this represents not just an opportunity to bet on Bitcoin's future, but on the infrastructure that will define it.