A few days ago, smartereum.com reported that one of the largest mining giants in the industry, Bitmain, allegedly lost $500 million in the third quarter of the year 2018 due to poor market conditions. This was depressing since Bitmain used to be responsible for more than half of the total Bitcoin mining hash power in the world. There have been rumors circulating in the cryptocurrency industry since last year about the mining firm going bankrupt. The most recent rumor that is trending on cryptocurrency Twitter is that the cryptocurrency holdings of Bitmain are down by more than 90%
Bitmain’s Cryptocurrency Holdings Down By Over 90%
The news started circulating after a cryptocurrency enthusiast, @btcking555 posted:
“Breaking News: Bitmain’s latest cryptocurrency holdings were just sent on WeChat by the insider. The post revealed that the mining giant now holds 6k worth of BTC and 750k worth of BCH. This sums up to about $130 million in value and is down by more than 90% within a twelve-month period. It also revealed that Bitmain liquidated about 500k BCH in the third and fourth quarter of 2018 to make up for significant losses. No wonder BCH fell significantly.”
Considering all the bankruptcy rumors that have been circulating about Bitmain for months now, one thing has become clear; the cryptocurrency mining giant is in need of funds. Selling off its cryptocurrency reserves is the last resort to stay in business amid bad market conditions. The company had planned to raise funds by hosting an initial public offering. However, this move is yet to be approved by the Hong Kong Stock Exchange. HKEx hasn’t denied the proposal yet but it has stated that the volatile nature of cryptocurrencies makes it reluctant about allowing cryptocurrency related IPOs. So, the chances of Bitmain getting approved are slim.
The Twitter user @btcking555 continued:
“The CEO of Bitmain is desperate to raise funds from other sources to avoid selling off any more BCH. He is also very angry about the leaks that his company lost up to have a billion in the third quarter of the year 2018.”
As expected, many people supported @btcking555. The CIO of Digital Currency Fund, Alister Milne agreed with @btcking555 stating:
“It appears Bitmain has dumped 16k BTC as well. This is probably part of the reasons why it broke below $6000.
Another user @eddyspenserwold gave a break down of the issue stating:
“In March 2018 Bitmain held:
Today Bitmain holds:
BTC 6,000 (70% down)
BCH 750,000 (25% down)
Bitmain still has faith in BCH.
In the third and fourth quarter of 2018, Bitmain sold more Bitcoin than Bitcoin Cash but Bitcoin Cash fell more.”
Still on that same thread another member of the cryptocurrency ecosystem, Udi Wertheimer said:
“I know shitcoin twitter is not going to like this reply, but if Bitmain liquidated ~50% of its holdings in about 6 months that’s rather bullish for BCH from now on”
Why Is Bitmain Falling?
During the Bitcoin Cash Fork war, Bitmain diverted some Bitcoin mining hash power to mining Bitcoin Cash. This led to a significant decline in the price of BTC. Unfortunately, the whole thing was a disaster as the price of BCH also fell significantly against the USD as well. This, and the general poor market conditions may have contributed to the current state of Bitmain.
Do you think the mining giant will be able to recover from this in the next few months? Post your comment below.