Chinese Firm Huatie HengAn Losses $23 Million in Its Secret Crypto Mining Business

A Chinese company subsidiary of Huatie, has been sold for $2 million after having a valuation of $25 million a year ago. The firm is called Huatie HengAn and the reason behind this plunge in its value is related to the drop in cryptocurrency mining profitability.

Company Losses 90% Of Its Value After Bear Market

As reported by the Chinese crypto site 8BTC, Huatie HengAn saw its value plunge from $25 million to just $2 million in just a year. The company purchased in the past 36,500 hardware machines labelled as “servers” from the firms Canaan and Ebang back in 2018.

These two firms are two of the most popular in the cryptocurrency market. They do sell hardware machines but not servers. Ebang and Canaan work in the crypto mining industry selling miners for virtual currencies.

The firm shows that they lost around $14 million in its subsidiary firm in 2018. However, by February 2019, the losses reached $23 million. Apparently, the parent company decided to measure these losses and sell the business to the market.

This shows that a large number of companies have been affected by the bear market in which virtual currencies were back in 2018. Several companies have reported losses while others had to stop operating. Even now, there are firms that are laying off employees since they are not able to pay for their salaries.

During the first half of 2018, mining companies did not seem to feel the bear market in the crypto space. The hash rate in the Bitcoin network continued to grow and expand despite the price fall during the same period of time. When Bitcoin reached $20,000, companies and individuals were very excited about the market moving to these values that decided to enter the mining industry.

However, this is a very competitive sector that requires companies to operate in a very efficient way.

This is why in November and December 2018, the crypto market plummetted and miners had to leave the industry. Hash rate fell and a few weeks later, difficulty in the network adjusted to allow miners to enter the market once again. Since that moment, hash rate in some networks such as Litecoin (LTC), improved substantially. Bitcoin’s hash rate has also been recovering since that moment.

Other cloud mining services such as Hashflare shut down due to the lack of profitability. For Bitmain, the largest mining company in the space, the situation became even worse with the price action experienced by Bitcoin Cash (BCH). Indeed, Ebang, Canaan and Bitmain abandoned their plans for Initial Public Offerings (IPO) in Asia. Meanwhile, GMO had to close its mining hardware enterprise.

Get Free Email Updates!

*Action Required* Enter Your Email for Trending Crypto News & Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.

[Domain Disclosure] The crypto-community content sourced, created and published on BitcoinExchangeGuide should never be used or taken as financial investment advice. Under no circumstances does any article represent our recommendation or reflect our direct outlook. We b-e-g of you to do more independent due diligence, take full responsibility for your own decisions and understand trading cryptocurrencies is a very high-risk activity with extremely volatile market changes which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Coin Market Cap Price Change 24 Hour Volume
BTC $162.95B $9,170.4511 0.73% $4.79B
ETH $28.55B $267.9456 0.93% $1.67B
XRP $18.51B $0.4356 1.51% $506.4M
LTC $8.67B $139.1278 3.77% $1.03B
BCH $7.36B $412.6607 0.84% $164.84M
EOS $6.3B $6.8443 1.39% $503.59M
BNB $5.01B $35.4670 2.33% $357.79M
BSV $3.98B $222.8839 1.09% $124.43M
USDT $3.54B $1.0018 0.06% $4.39B
XLM $2.41B $0.1242 0.02% $65.24M

Get 3 Free Bitcoin eBooks for Limited Time Only

Receive three exclusive user guides detailing a) What is Bitcoin b) How Cryptocurrency Works and c) Top Crypto Exchanges today plus a bonus report on Blockchain distributed ledger technology plus top news insights.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.