Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 126

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 5
Chunk 126
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in power costs and disruption of power supply will decrease our operating margins.

As the market value of digital
assets has increased, the demand for the newest, most efficient miners has also increased, leading to scarcity in the supply of and thereby
resulting increase in the price of miners. As a result, the cost of new equipment can be unpredictable, and could also be significantly
higher than our historical cost for new miners. We may have to obtain miners and other hardware from suppliers at higher prices than expected.
In addition, we rely on a limited number of suppliers for their provision of hash calculations, miners and hosting facilities, and such
suppliers could increase their pricings due to factors beyond our control. Higher cost will adversely affect our profit margin if it is
unable to pass the additional cost to our customers.

Ability to improve customer acquisition
and retention and compete effectively

Our success also depends on
our ability to retain and develop opportunities with existing customers and attract new customers. Our relationship with our major customers
is critical to our success. In 2022, 2023 and 2024, sales to our top three customers accounted for 31%, 26% and 31% of our total revenue
in the same periods, respectively. Our ability to maintain our existing customers and attract new customers is determined by a number
of factors, including our pricing strategies, mining efficiencies, customer services and brand recognition. In addition, we compete with
other companies that focus all or a portion of their operations on mining activities at scale for customers. We face significant competition
in every aspect of our business, including, but not limited to, the acquisition of mining resources at reasonable costs, the ability to
raise capital, access to energy sites with reliable sources of power, and technology capacity.

Regulatory environment

Our financial prospects and
continued growth depend in part on our ability to continue to operate in a compliant manner with all rules and regulations. Our business
is subject to the oversight of numerous regulatory agencies in Singapore, the United States, UAE and other jurisdictions where we
currently develop or may develop business operations in the future. We are subject to significant uncertainties regarding future regulations
pertaining to the holding, using or mining of Bitcoin and other digital assets in these jurisdictions. While Bitcoin and other digital
assets have gradually gained more market acceptance in many countries, digital mining and blockchain transactions are anonymous and may
be used for illegal transactions. Some jurisdictions have introduced restrictions over the uses of digital assets and the conversion between
digital assets