Fresh news coming straight out of Bitmain confirms rumors that Jihan Wu – Bitmain ex CEO – is to step down, with his new successor Wang Haichao being tasked with rebuilding the firm. In a rather unusual move, Haichao has ordered that Bitmain suspends all crypto mining operations while he gets settled and develops a plan of action. This move is only going to make matters worse for the hardware manufacturer, who at its peak controlled more than 43% of the total Bitcoin network hash rate.
Rockdale Facility on “Temporary” Shutdown
Haichao’s new Bitmain has decided to temporarily pause operations at its Rockdale mining farm in Texas while it reassesses its situation. Back in August 2018, Bitmain promised to invest a total of $500 million into the farm in Rockdale over a seven-year period, but amidst its restructuring, Haichao is now reneging on this deal and looking to strike a much smaller deal. Bitmain has already cut its Rockdale workforce from 15 employees down to just five and if local judges fail to approve this new deal then it could be game over for Bitmain in Rockdale.
Major Company-wide Layoffs
Across the globe, Bitmain has cut more than 50% of its entire workforce and no department has been safe from the job cuts. The entire AI development team from Israel and the Bitcoin Cash Go client development team have both been let go in the restructuring process, with no future for these projects in the pipeline. This has many staff members fearing for their jobs as it’s not clear which team will be the next to get the axe.
Massive Losses Across the Board
Anyone with sizeable crypto holdings lost a fair amount over the course of 2018, but Bitmain’s losses eclipsed even that of billion-dollar hedge funds. According to leaked data, Bitmain lost more than $740 million from the bearish market movement. These losses don’t take into account the incredible losses from the Bitcoin Cash hash war – both from BCH holdings and diverting its mining power away from BTC to BCH.
IPO is Off the Cards
Back in September 2018, Bitmain filed a draft application for an IPO to the Hong Kong Stock Exchange (HKEX) in the hopes of securing much-needed funding. However, the HKEX announced that it wasn’t going to consider hosting IPOs of firms operating in the blockchain and distributed ledger technology industry any time soon. This negative sentiment from the HKEX was the final piece of bad news that Bitmain needed and is likely the reason Jihan Wu has been axed as the CEO.
Unless Haichao can perform some miraculous feat and turn Bitmain’s future around, we could see Bitmain fade away into the shadows before the end of Q1 2019. Bitmain has already made its way into the Deutsches Technikmuseum in Berlin, and this is a good a resting place as it could ever hope for. Perhaps it’s time for Haichao to wind Bitmain down, pay off creditors, and call it a day, as it’s going to be very hard for the hardware manufacturer to come back from this massive blow.