Bitmain is living its nightmare in the early parts of 2019 after releasing a public report that showed the company lost about half a billion dollars in the last quarter of last year.
Bitmain is the world’s biggest manufacturer of mining equipment and the force behind the popular bitcoin ant miners, but its reputation did not spare the company from being swept along with other crypto-oriented companies following the winter bear.
The giant mining company was among the first to lay off most of its staff, and massively at that, alongside ConsenSys and Steemit. Bitmain was reported to have laid off more than 50 percent of its staff following a hard year, streamlining its workforce to about 1500. It is important to note though that Bitmain had started the year with a little over a thousand employees and tripled their entire workforce given their increasing profit. However, after sweeping off everyone’s feet by generating revenue of $2.8 billion in the first six months, the following three months barely coughed up to $200 million and the last three a cold disaster.
Bitmain had made no secret of their planned Initial Public Offering (IPO) on the Hong Kong Stock Exchange (HKEX), but their recent struggles might make the difficult dream of an IPO for a cryptocurrency-affiliated company even less attainable.
This is the first public release that shows Bitmain’s reversal of fortunes and a sharp decline from the huge revenues it had been raking in. Bitmain which holds mostly digital assets—Bitcoin, Ethereum, Bitcoin Cash, and Dash—saw the value of many of the cryptocurrencies crash down to less than 50 percent of their values. For example, as at June last year, towards the end of the second quarter, BTC was worth about $6500 and BCH $740; the figures have rallied down since then, prompting HKEx to question Bitmain’s sustainability and planning
HKEx has been cautious and even unwilling to accept petitions from cryptocurrency affiliated companies, and Bitmain’s new release might just prove them right. After being valued at more than $800 million in crypto holdings, Bitmain’s valuation had already dropped by $100 million just barely two months after. The inconsistency and knee-jerk response of Bitmain to lay off staffs due to the cryptocurrency market’s volatility have raised some questions. It remains to be seen what HKEx makes of Bitmain’s new update.