Bitmain Crypto Mining Juggernaut is Facing an Uncertain Future With Ongoing Crypto Bear Market
It's usually not good news to hear that members of a company's leadership will step down, for any member of a tech company, it would be a death sentence for its share value. But for Bitmain, not one, but two will be stepping down.
More specifically, Jihan Wu and Macree Zhan Ketuan, who have both announced that they will be stepping down.
A bit of Context on Bitmain
The co-founders that are now stepping down had initially founded the company back in 2013. Both founders boasted a good level of experience academically speaking, with Jihan Wu working as an equity fund manager, while Ketuan had previously sought to raise funds for a video streaming business.
It was during the bullish year of 2013 that the first cryptocurrency mining hardware – Antminer S1, setting Bitmain on an upwards trajectory. While 2014 brought with it a number of setbacks, with the continuation of hardware development and production helped to stabilize Bitmain in the wake of the crash of Mt. Gox.
By 2017, Bitmain managed to successfully land over $3 to 4 billion worth of revenue over the period, managing to outpace its more well-known rivals such as Nvidia. Bitmain has since announced in 2018, that it will be pushing into the world of Artificial Intelligence.
The Lay of the Land – Bitmain's Decline
During the latter half of 2018, the two mining pools that Bitmain operates in alongside AntPool and BTC.com, with bitmain contributing 41 percent to the total marketing share. This sounds like a good segment of the pool, however, if we zip forward to January 2019, this has declined dramatically, down to 23 percent.
The bear market, as we can see, is wreaking havoc on Bitmain and its market share, with the bearish year causing some lasting damage to the mining company.
Bitmain's Slashing at Staff Internationally
One of the other the major signs that Bitmain is struggling is down to a report made by South China Morning Post on Dec 26th, which announced a significant number of job cuts in Hong Kong. The announcement read:
“A part of [building a sustainable business] is having to really focus on things that are core to that mission and not things that are auxiliary. As we move into the new year we will continue to double down on hiring the best talent from a diverse range of backgrounds.”
While the number is not disclosed by the Hong Kong branch, it's not isolated to S.E Asia, with Israel being another hit by losses. Bitmain's development center based in Israel would officially close Bitmaintech, resulting in the firing of 23 former employees.
Bitmain IPO now has Class-Action Lawsuits on the Horizon
In addition to the growing issues that it has in a now bearish market, along with dismissals, cutbacks to staff and international departments, Bitmain is now looking down the twin barrels of class action lawsuits.
One of the first suits filed against Bitmain was in California by Gor Gevorkyan due to the hardware he purchased proving overly difficult to configure over time, as well as lapsing for ‘a substantial amount of time.' This caused Gevorkyan to launch and use the Antminer at full power at his own expense. The plaintiff is seeking $5 million in expenses on behalf of a wide range of clients of Bitmain that may have suffered the same issues.
The second being launched by UnitedCorp, which filed a legal suit on December 6th, with Bitmain being part of the legal action alongside Roger Ver, Kraken and Bitcoin.com. All of which were incriminated in the possible takeover of Bitcoin Cash (BCH) during its hard fork in November.