Bitmain again having lay-off issues

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Recently there have been numerous rumors saying that Bitmain is about to lay-off almost 50-85% of their staff, because of the crypto market downfall issues. Bitmain is a mining equipment company which has suffered a massive drop in the interest of their mining business as a whole. 

Rumors out of a Chinese LinkedIn with very “high accuracy”

All these rumors are backed by a mysterious Chinese-like LinkedIn called Maimai, where some of Bitmain’s employees have created a long thread about a significant layoff planned by Bitmain. In the thread, they were discussing the possible salaries and bonuses they would get. Some comments speculate on the number of job positions being let off, but all-in-all, it’s just a social media site.

These could be just pissed-off employees spreading lies about the company.

An official who wants to stay anonymous

Later, the South China Morning Post stated that both, Huobi and Bitmain, has confirmed the layoffs, but the Bitmain official wanted to stay anonymous because this news still hasn’t been revealed to the public. He denied that Bitmain was about to lay off 50% of their staff, but also didn’t specify anything in particular.

Bitmain closes Israel development arm

Earlier this month, Bitmain laid off all their 23 employees in their Israel department. This department was mainly for research purposes. Only a few months earlier, they were about to hire 40 new researchers. The branch leader, vice president of Bitmain, who also got laid off, stated: “The crypto market has undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation.”

Has Bitcoin Cash anything to do with this?

It was previously reported that Bitmain sold almost all their Bitcoin for Bitcoin Cash. Also, Bitmain is one of the, if not the biggest, supporter of Bitcoin Cash with Jihan Wu in the front. Believably, Bitmain holds somewhere from 664,000 – 1,33 million BCH coins. Earlier this year, during March, Bitmain had about 22k BTC, but during December 2016, they had about 71k BTC. That indicates that they are either covering their expenses with BTC or selling it for BCH. Who knows how much they have left.

Revenue, profits, and IPO.

These are abnormal figures we’re talking about. For more, last year they recorded a stunning $2 billion in revenue, with $1,22 billion of it being profit. And this is only counting their primary business – mining equipment. God only knows how much other coins have they mined and stored. However, they decided to do an official IPO and managed to raise $400 million with an objective to raise $1 billion before beginning their efforts in securing their IPO. In September they filed for officially going public. That poses a simple question – why do you need more money, when you have almost all of it?

Bitcoin Cash or Bitmain

It looks like Jihan Wu is in an unbearable situation. Mining business is falling, and so is Bitcoin Cash‘s price. Jihan is entirely behind BCH in this recent hash war with Bitcoin SV. Much like dumping his employees, after a while and a few billion, he could stop supporting BCH as well. That would mean a complete loss of hash rate, and possibly the end of this cryptocurrency.

Also, there were rumors from Samson Mow that Bitmain is shutting down their Bitcoin Cash development team Copernicus which was responsible for the Bitcoin Cash GO client.

This bear market is severely damaging the crypto ecosystem, as most of the companies which felt stable last year, or at the beginning of this year, now feel endangered and clueless about their future. Though one thing is not clear – how can you earn so much money (Bitmain) and still ask for more? People are still waiting for Bitmain’s next revenue reports. 


The United Arab Emirates plans to introduce ICOs by 2019.

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On October 8, the head of securities regulator of The United Arab Emirates (UAE) have announced that they are going to introduce ICOs to provide companies with a new way to raise money.

Since the oil price has been low and the equity markets weak in the past years, IPOs have seen a severe downgrade in the UAE and the Gulf Arab region as a whole.

“The board of the Emirates Securities & Commodities Authority has approved considering ICOs as securities. As per our plan we should have regulations on the ground in the first half of 2019,” explained the Acting Chief Executive Officer of the Securities and Commodities Authority (SCA) in the United Arab Emirates, Obaid Saif Hamad Al Zaabi, continuing that “ESCA is drafting regulations for ICOs with international advisers and is working with the Abu Dhabi and Dubai stock markets to develop trading platforms for the offers.”

Basically they are calling all ICOs securities, which goes together with the U.S. SEC statement that ICOs can be securities only if they are “based on specific facts, and fall under the SEC’s jurisdiction of enforcing federal securities laws,” says in the definition by SEC.

This is an open statement to the crypto community, as a lot of people are disagreeing with the fact that all ICOs could be defined as securities. If so, that would mean that ICOs could fall under the regulatory rules for securities. And it looks like this could happen in the UAE, when the new law will take place in early 2019.

What do you think? Are all ICOs securities with a few exceptions?


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Bitmain filed for an IPO in Hong Kong.

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On Wednesday, the worlds largest cryptocurrency mining manufacturer Bitmain, filed for an IPO to list in Hong Kong. 

In the past year, Bitmain has seen remarkable growth mostly because of the whole crypto market booming at that time. Crypto mining was popular and the equipment cost a lot. And it shows up in the numbers provided by Bitmain as well. In the past year Bitmains’ profits were around $1,4 billion and the whole revenue was around $5.1 billion, which most likely all came from selling mining rigs for cryptocurrency.

Now when the markets are plummeting, the picture does not look that great at all. Mining is becoming a luxury only for wealthy enough individuals and the new mining hardware is outperforming the previous ones. It is rumored that Bitmain still has $900 million worth of unsold mining gear in June, which at the moment, if held any longer, could become useless. At the moment, AntminerS9-Hydro is sold for $719.

If not speaking about all the FUD that Bitmain has received because of purchasing 1 million Bitcoin Cash (BCH) coins for Bitcoin (BTC), but if we rather look at the situation as a whole – Bitmains’ next years profits aren’t looking that bright anymore. Because the company is mostly dependent on the crypto market prices. Specifically Bitcoin price, because Bitcoin kind of sets the mood for the whole market. So if the market keeps plummeting, then cryptocurrency mining slows down as well. Bitmains’ revenue decreases as well, because they hold their profits in cryptocurrencies. And if this keeps going on for a while, Bitmain might be on the path of closing their business.

As mentioned above, Bitmains’ business model is mostly dependent on cryptocurrency market prices. But if we see a completely different scenario, and the market turns 180 degrees, and starts rocketing towards new all time highs – then the Bitmain business will see its second breath of a new life.

So if asked whether to invest in this IPO, the answer would be rather no than yes, because this year has been hard for crypto markets, and the near future doesn’t look like is going to change fast, because there are major regulations and ETF approvals to come which both could change the pace of crypto markets.

At the same time – Bitmain hasn’t specified anything on their upcoming IPO, neither the price nor on how much they are planning on raising.


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Bitmains’ IPO and BCH (Bitcoin Cash) scandal

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Recently Bitmain, the worlds cryptocurrency mining giant, announced that they will be having an IPO (Initial Public Offering). This could be the worlds biggest IPO seen this far, since it is rumored to to hold around of $14 billion.

That’s all nice and dandy, but there are some hidden gems in this story. First, the CSO of Blockstream, Samson Mow tweeted an image of what appeared to be a leaked version of the Bitmain investors deck. It revealed that Bitmain had sold around 70% of their bitcoin holdings into alomst 1 million BCH coins. He writes:

“According to the Bitmain pre-IPO investor deck, they sold most of their #Bitcoin for #Bcash. At $900/BCH, they’ve bled half a billion in the last 3 months. If Bitcoin Core devs didn’t disclose the Bcash vulnerability, it could’ve wiped a billion dollars off their balance sheets.”

Next he highlighted that Bitmain had published only the Q1 numbers and claimed that Bitmain might be hiding the Q2 results, because they are a disaster.

“Why is Bitmain raising capital so fast & only showing Q1 results to pre-IPO investors? We’re well into Q3 now. The reason is Q2 was a disaster. Bitmain is sitting on a massive $1.24 billion USD in inventory & S9 prices dropped by ~85%! Q2 losses range in the $600-700 millions”, he writes in his tweet.

So why Bitmain sold almost all of its Bitcoin holdings? Some are speculating that it was done to pump the price of BCH. Another claim is that they were afraid of the Bitcoins’ Lightning Network which would decrease the miners profits, which resulted in the BCH fork. They also were behind the Bitcoin 2X fork, which failed.

As Vijay Boyapati (@real_vijay) writes in his twitter thread – “The creation of BCash was based on the fear that if Bitcoin were to scale using second layer technologies (such as Lightning Network), Bitmain’s profits through mining fees might dwindle”, adding that “Bitmain is sitting on paper losses of hundreds of millions of dollars from this botched trade. But even worse, they have no ability to exit their billion dollar position in BCash without a complete collapse in its price.”

All this sounds very cheeky to me, because the company (Bitmain) is obviously trying to save their unsuccessful trade positions. Which is understandable, from a mining monopoly point of view. Bitmain nearly holds 51% of total Bitcoin hashrate and mining services and products are their main business field.

But the thing that frustrates me the most about this issue is that Bitmain could be behind the massive propaganda movement what is going on between BCH supporters since I can remember it – Bitcoin Cash is the real Bitcoin. Now it makes more sense from the Bitmain point of view. And if it is true, then Bitmain is executing a really aggressive marketing strategy which affects the newcomers in the crypto-industry by spreading lies to the community. But the worst thing might be that with this action they are putting two crypto communities against each other. And all that is done because of greed.

I hope that none of this is true and just a bad speculation of coincidences, because this could affect the crypto-industry in a really bad way.