Bitmain To Reduce Workforce By 80% Following Cryptocurrency Price Crash


The price crash in the cryptocurrency market has put many cryptocurrency related businesses under a lot of heat. Some have gone out of business completely while some others have had to reduce their workforce because of a lack of funds to continue operations. Now, even the big names in the industry are cutting costs too. The recent report hints that Bitmain, a leading cryptocurrency mining company, will be laying off 80% of its workforce as part of its effort to cut costs.


Bitmain Lays Off Staff To Save Cost


Kyle Samani, the co-founder of Multicoin Capital on his official Twitter handle, posted that Bitmain will be liquidating its cryptocurrency assets in a bid to accumulate fiat currency to run the business. About $315.5 million in cryptocurrencies will be liquidated. The decision by the company to lay off its staff didn’t sit well with the cryptocurrency community. In fact, reports claim that the team that was developing a Bitcoin Cash client was part of the group that was fired.


In August, a financial document that was leaked showed that the cryptocurrency mining giant holds about 930,932 LTC, 1,021,316 BCH, 312,424 DASH, 22,082 BTC, 1,097 ETH. At press time, the total fiat value of the assets held by Bitmain was $315.5 million. Right now, there is no indication that BTC has already liquidated some of its crypto assets but Samani believes that this news is enough to lead to an all out selling fiasco. This is going to happen if Bitmain runs out of funds even after laying off its staff.


Is There A Lot Of BTC Selling Pressure At The Moment?

Even if Bitmain is having financial crisis, the chances of dropping its BTC reserves are relatively low. This is because BTC is one of the few cryptocurrency assets that has a promising future even with the current price crash. The chances of liquidating its Bitcoin Cash reserves is also low because the Bitmain development team put a lot of effort into BCH during the November hash war. This shows that the mining giant has faith in BCH.


Even if downsizing may be bad for those employees who are being laid off, it is typically a bullish sign for the company. It shows that Bitmain is trying to govern its spending against its revenue. The company is trying to change its strategy as it attempts to survive this bearish storm.


What The Future Holds


To raise capital, Bitmain can also decide to get additional capital without exhausting their cryptocurrency reserves. The firm intends to host an IPO round worth $12 billion in Hong Kong. Even if the application may be rejected, Bitmain may decide to apply again when its infrastructure improves.


During a funding round that was led by Sequoia Capital, Bitmain was able to generate $400 million. Right now, the company holds about 67% share in the mining equipment market. In the cryptocurrency mining industry as a whole, it controls about 60% of the market share.

Bitcoin (BTC) Price Today – BTC / USD
Name Price24H (%)
Bitcoin (BTC)
$3,605.16
-1.09%


Whether or not Bitmain liquidates its BTC reserves or not, one thing is certain, Bitcoin is here to stay and so is the entire cryptocurrency industry. It will eventually recover and find relative stability.

Leave a Reply

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