Over the past few months, things have gone from bad to worse for a certain leading manufacturer of crypto mining hardware. Dents in Bitmain’s armor began to show in early September, as Bitewei – another mining hardware manufacturer – started to roll out more powerful ASIC mining rigs at a lower cost. Since then, Bitmain has been circling the drain and January looks set to be the end of an era for the former crypto mining hardware powerhouse.
Reports of Jihan Wu’s Departure
In a report from a Chinese media outlet, there are claims that sources close to Bitmain have leaked information that Jihan Wu – the current co-CEO of Bitmain – is preparing to step down from his position in the company. The report also claims that he will be handing his position over to a mystery man, surnamed Wang. Apparently, Jenke Group – Bitmain’s other co-CEO – will also be leaving Bitmain, citing that having co-CEOs isn’t helping the company. This report is currently still a rumor and Bitmain has yet to verify these claims as true, but given Bitmain’s rocky year it’s very likely that Jihan Wu is choosing now as the perfect time to jump ship.
Layoffs Throughout Bitmain
Just before Christmas, Bitmain announced that it was shutting down its AI research project in Israel and letting all 23 staff members go. While many thought this would be the end of the head-count culling, Bitmain followed up by shutting down its Bitcoin Cash Go client development team. It’s thought that Bitmain will reduce its total head-count by 50% before the end of Q1 2019.
No IPO to Stay Afloat
It appears as if Bitmain was heavily relying on an IPO for a cash injection to keep the business afloat, but after the Hong Kong Stock Exchange (HKEX) came out and said it won’t consider any DLT based IPOs, Bitmain knew the game was up. This IPO was Bitmain’s final shot at securing enough money to develop its next generation of ASIC mining rigs and hold on until the crypto markets rebounded. Now. Bitmain is rumored to have very little in the way of cash reserves and could disappear from the crypto landscape forever in the months to come.
Crypto Winter Taking its Toll
Just in case Bitmain needed any more bad news, according to leaked documents Bitmain lost more than $740 million in 2018 due to bad investments and the prolonged bear market. These colossal losses don’t factor in the losses incurred following the Bitcoin Cash hash war and the price collapse of BCH. Bitmain is well known to hold huge reserves of crypto in BCH, and the devaluation of BCH will have hit the mining hardware giant incredibly hard.
If the rumors of Jihan Wu’s departure are true, it could spell catastrophe for Bitmain. However, other crypto mining firms and mining pools will be getting very excited, as the prospect of Bitmain no longer mining Bitcoin will give all miners a much greater percentage of total network hash rate. This could potentially allow for a large mining outfit to attack the Bitcoin network and take over as the largest mining pool. While this is still yet to be seen, we could see an interesting fight for dominance over the Bitcoin network hash rate.
