Bitmain Financial Woes Continue, Pulls Plug on Texas Crypto Mining Facility Plans in Rockdale

Earlier this week BitcoinExchangeGuide had bought you a story on Bitmain’s Co-Founders stepping down as co-chairs. Additionally, the Hong Kong Stock Exchange (HKSE) doesn’t seem to be very supportive of their IPO.

At one point, Bitmain sold many of its miners, and it attempted to establish dominance over the industry by entering a price war which its competitors would not be able to afford. This happened before the second market crash, while Bitcoin's price was between $6,400 and $7,000, which still allowed the company to make money, even if it made some risky moves in this period.

The demand for mining was still relatively high at the time, and the company was not as worried about its losses. The November market crash which eventually brought Bitcoin to the price of $3,200 marked a big turnaround. Bitmain naturally experienced struggle as well, with a negative profit margin of over 11%.

Bitmain had to lay off around 50% of its workers in Q4 2018, with one Bitmain employee confirming that the actual percentage is even higher. In fact, this individual stated that some departments would have to be let go entirely because of the market situation.

Texas Project On Hold

To add to the aforementioned troubles, there is news coming in which says that they are putting the $500 million bitcoin mining project on hold. Steve Young, the Milam County Judge of Texas Public Radio (TPR) said:

“I’m really disappointed because we had advertised this. We had waited for this and had wanted this. We had welcomed this. This was huge. We need some positive news here and some jobs here. We need a tax base here, and this was a step in the right direction.”

Young issued a statement earlier in the day saying all Bitmain employees other than two engineers and the director of human relations had been laid off and all operations had been suspended. Young later said things aren’t as dire as he originally thought and the company has told him it will continue with a less ambitious facility.

When Bitmain announced it was bringing the $500 million investment and 400 jobs to an aluminum smelter outside Rockdale in July, the value of Bitcoin was over $8,000 per coin. Today, it's less than half at $3,700.

There seems no way that at this value for Bitcoin, Bitmain will be able to continue with their expansion plans. Just like most crypto investors, even Bitmain is hoping for the next Bull run.

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