Company: FUFU
Filing Date: 2025-04-21
Form Type: 20-F
Source: 0001213900-25-033733
Chunk: 38

Company: Bitfufu Inc.
Filing Date: 2025-04-21
Form: 20-F
Item: Item 3
Chunk 38
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 gain as a result. Any such change to transaction validating protocols could have a material adverse effect on our business,
financial condition and results of operations.

Substantial increases in the supply of mining
equipment connected to the blockchain network would lead to an increase in network hash rate, which in turn would increase mining difficulty
and negatively affect the economic returns of digital asset mining activities, which would decrease the demand for and/or pricing of our
services and products.

The difficulty of digital
asset mining, or the amount of computational resources required for a set amount of reward for recording a new block, directly affects
the expected economic returns for miners, which in turn affects the demand for our miners and services. Digital asset mining difficulty
is a measure of the amount of hash calculations required to record a new block and it is affected by the total amount of hash rate in
the digital asset network. The digital asset algorithm is designed so that one block is generated, on average, every ten minutes, no matter
how much hash rate is in the network. Thus, as more mining capacities join the network, and assuming the rate of block creation does not
change, the amount of hash calculations required to generate each block and hence the mining difficulty increases. In other words, based
on the current design of the digital asset network, digital asset mining difficulty would increase together with the total hash rate available
in the digital asset network, which is in turn affected by the number of miners in operation.
Further growth in the
total hash rate in the blockchain network may drive up the difficulty of digital asset mining and resulting in downward pressure on the
expected economic return of digital asset mining and the demand for, and pricing of, our services and products.

A slowdown in the demand for blockchain
technology or blockchain hosting resources, or lack of market acceptance of blockchain networks and digital assets could have a material
adverse effect on our business, financial condition and results of operations.

Adverse developments in the
blockchain and digital asset industry could lead to a decrease in the demand for our services and products, which could have a material
adverse effect on our business, financial condition and results of operations. Additionally, the collapse and subsequent insolvency proceedings
of FTX also expose us to the contagion risks related to the broader digital asset industry. We face risks including:

  a decline in the adoption and use of Bitcoin and other similar digital assets within the technology industry or a decline in value of digital assets;  

  increased costs of complying with existing or new government regulations applicable