Cryptocurrency miners are facing a storm and in the case of the giants such as Bitmain which focuses on ASIC mining chips it is no different. Twitter user BTCKING555 has leaked that Bitmain has lost a thunderous $740 million in the third quarter of 2018. These detrimental losses come at a time when the Bitmain is planning an initial public offering (IPO).
We got leak of Bitmain Q3 numbers! COMPLETE DISASTER. The company lost $740 Million including losses on inventory and bitcoin cash! And this is not accounting for hash war costs! #bitmainipo @HKEXGroup
— BTCKING555 (@btcking555) December 4, 2018
If true, the loss curtailed by Bitmain could be their worst quarter ever recorded. This follows Quarter 2 of 2018 which was fairly disappointing as well.
Bitmain has been diversifying it’s main business of Bitcoin mining hardware to mining farms. It has 11 mining farms in China and is looking at building three new mining farms in the US and one new mining farm in Quebec, Canada. Hence it is an indication that its primary business is not performing as well.
The loss may prove to be true as there is a significant drop in demand for mining rigs, which was already felt in the second quarter of Bitmain. However what may have affected Bitmain is the Bitcoin Cash it holds.
Bitmain was one of the loudest voices for the Bitcoin Cash ABC (BTHABC) version of Bitcoin Cash. It recorded additional losses on the mining activity during the hash wars which apparently resulted in $500,000 per day, which is still not accounted for according to the tweet.
Additionally, Bitmain has released the 7 nanometer ASICs, S15 and T14 at a time when SHA-256 mining for Bitcoin is in significant decline. The low demand for ASIC as capacity has fallen means that Bitmain’s overall business will suffer.
The reasons for Bitmain’s delays of it’s IPO throughout the year is now becoming clearer!
With Bitmain’s IPO scheduled in January 2019 leading to more transparency on its accounts, and the current bear markets of Cryptocurrency the current scenario of Bitmain does not look very promising.
Image Source – Flickr
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