Monday , October 18 2021

Bitmain Firing 80% Workforce is bad for Bitcoin Cash and Litecoin



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According to several reports, Bitmain, the encryption mining giant, is running out of funds. And that may be bad for Bitcoin Cash and Litecoin.

US $ 315.5 million in Crypto-Assets

Kyle Samani, co-founder of Multicoin Capital, a cryptographic fund, warned in a Tweet that Bitmain would liquidate its encryption assets to accumulate trust funds for its business operations. The prominent analyst quoted recent media reports that accused the Beijing company of dismissing half of its staff. Among the dismissed – as reported – is a team that was working on the development of a Bitcoin Cash client.

According to a leaked financial document In August this year, Bitmain currently has 930,932 LTC (~ 28.6m), 1,021,316 BCH (~ 176.7m), 22,082 BTC (~ 83.3m), 312,424 DASH (~ 26m) and 1,097 ETH ( ~ $ 142k) tokens. At the time of printing, the fiat equivalent of Bitmain's entire portfolio of cryptographic assets is about $ 315.5 million.

If Bitmain has already covered any part of its encryption portfolio, it has not been found. But according to Samani, the fact that Chinese encryption mining holds a large number of digital currency reserves leads to a possible sales scenario. This, of course, is only possible when Bitmain feels he is out of money despite firing half of his workforce.

Is Bitcoin under sales pressure?

Bitmain, like any other retail investor in cryptographic space, would be less likely to give up its Bitcoins reserves, especially as it is among the few cryptographic assets that are looking for a bright future with the start of the new year.

The same could be said about Bitcoin Cash, which Bitmain wholeheartedly supported during the November "hash war". But since the launch of the Bitcoin Cash development team, Bitmain's likelihood of maintaining its Bitcoin Cash reserves seems slim.

Then again, the layoffs themselves are a kind of high indicator – a company practices downsizing when it wants to govern its spending in relation to its revenue. Bitmain, like any other encryption company, launched new products while boosting the crypto euphoria of late 2017. But as demand evaporated into its product line – cryptography chips in particular – the company had to restructure its priorities hoping to survive the most depressing phase of cryptography.

What is the next?

Bitmain can also choose to seek additional capital without spending too many brains on selling its encryption reserves. The company has already shared its plans to open capital through a $ 12 billion IPO round in Hong Kong. Recently, its application on the Hong Kong Stock Exchange and Clearing Limited (HKEX) met the possibilities of rejection. The company could file another IPO prospectus in the future after repairing its infrastructure, starting with a layoff that is already underway.

Bitmain raised $ 400 million from a round of pre-IPO financing led by Sequoia Capital. The company currently holds a 67% stake in the bitcoin mining equipment market and provides about 60% of the total computing power of the mining industry.

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