Crypto VC Says Bitmain Layoffs ‘Extremely Bearish’ for Bitcoin Cash

Ongoing layoffs at cryptocurrency mega-firm Bitmain may begin a contemporary wave of promoting in Bitcoin Cash and Litecoin markets, based on outstanding crypto investor Kyle Samani.

The cryptocurrency-focused enterprise capitalist mentioned in a tweet that the Bitcoin mining large is — if rumors are true — working out of cash to proceed its operations throughout mining and blockchain improvement. The monetary shortage has led the Chinese agency to downsize its workforce, reportedly by 50 p.c or extra. And to additional meet its ends, Samani mentioned Bitmain would doubtless dump its crypto stockpile, which features a large variety of Litecoin and Bitcoin Cash tokens.

A Leaked Financial Report

Samani’s bearish idea relies on Bitmain’s alleged financial report which was leaked in August this 12 months. If real, it revealed that the corporate was holding near 931,000 Litecoin (LTC) and 1 million Bitcoin Cash (BCH). According to the present charges, Bitmain should be holding circa $28.6 million in LTC and a whopping $177 million in BCH. The firm, as much as the time of this writing, has not verified the leaked monetary doc.

Translated from Chinese | Leaked Bitmain Financial Report | Source: Anonymous

The leaked doc additionally exhibits Bitcoin, Dash, and Ethereum as part of Bitmain’s portfolio, with holdings near $84 million, $26 million, and $142,000, respectively. Combined, Bitmain has $316 million price of cryptocurrency reserves, offering the corporate hasn’t dumped even the slightest portion from it since August.

Bitcoin Cash Under Spotlight

Bitmain, based on reviews, has fired the entire Copernicus team which was engaged on the event of a brand new Bitcoin Cash shopper. The transfer comes after the mining large backed the Roger Ver-allied Bitcoin Cash ABC to combat an expensive hash war in opposition to its forked cousin, Bitcoin SV. Though not confirmed by Bitmain, allocating huge quantities of computing energy to help the BCH community may have led the corporate to face hundreds of thousands of {dollars} price of financial damages. On high of that, the per token worth of Bitcoin Cash additionally dropped by greater than 60% because the starting of the hash struggle November.

BCTKING555, a Twitter account which primarily posts detrimental reviews and rumors about Bitmain, claimed that the corporate had privately reported $740 million price of losses in Q3 which doesn’t even embrace the damages incurred through the Bitcoin Cash fork. Citing publicly-available knowledge, BitMEX Research additionally estimated that Bitmain doubtless posted vital losses in Q2 following a wildly-successful first quarter.

The occasions may put Bitcoin Cash beneath the bearish highlight, hinting that retail traders could be much less prone to discover the undertaking secure.

Whither the Bitmain IPO?

The Bitmain layoffs may stabilize its outflows in opposition to the reported losses within the near-term. Also, the corporate has sought approval to carry a historic IPO in Hong Kong. However, recent reports point out that HKEX regulators aren’t glad with the state of the crypto business. Thus, some consider HKEX would possibly reject the IPO for backing a product which they consider is just too nascent.

With all of the doorways closed, the following step for Bitmain could possibly be to succeed in out to enterprise capitalists for further funds or, as Samani predicted, promote some portion of their digital property. The firm nonetheless maintains greater than 60% of the general crypto mining market.

Featured Image from CoinGeek/YouTube

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