The Downturn of Bitmain – A Colossus in Peril

According to the latest insights, the leader in ASIC mining technology and large-scale crypto operations Bitmain finds itself in a spiraling decline that threatens its survival. Various reports indicate that Bitmain has let go of up to half of its workforce, discharged numerous Bitcoin Cash developers, and closed down portions of its mining activities. Some yet-to-be-verified reports from Chinese news outlets even indicate that the current CEO could be stepping down amid this turmoil. Join us as we explore what seems to be the decline of Bitmain, or at least the precarious position it currently occupies.

Giant No More

For the last few years, Bitmain stood as the uncontested champion of ASIC mining equipment and managing expansive bitcoin, Litecoin, Bitcoin Cash, among other crypto mining ventures. Understanding Bitmain can be challenging as its operations are shrouded in secrecy. In the public eye, Bitmain is most recognized for its Antminer series of ASIC hardware.

Back in late 2017, Bitmain's mining machines were in high demand, often selling out quickly and fetching two to three times the retail price on different secondary market websites. But in today's landscape, as the prices of crypto assets stabilize and mining profits hit a record low, the latest Antminer models like the S11 are available for just $525. Looking at coinwarz.com's mining calculator, one would need over 2,161 days or roughly six years to recover costs using an Antminer S11 when electricity is priced at $0.10 per kilowatt-hour, assuming mining difficulties remain unchanged, which is unlikely. Thus, the current projections for Bitmain's hardware are far from encouraging.

Read: Introducing Bitmain: A Beginner's Perspective on the Controversial ASIC Mining Giant

An Investment Gone Wrong

One factor contributing to Bitmain's financial woes may be its considerable investments in Bitcoin Cash. This includes hiring a dedicated team to support its development and allocating substantial mining resources. instead of BTC .

In early 2018, Bitcoin Cash hovered around $2400 per coin. Fast forward, it now trades well below $200, having hit a low near $79 by mid-December 2018. While the majority of cryptocurrencies have sharply dropped since January, Bitcoin Cash seems to have plummeted even further. Consequently, Bitmain's investments in Bitcoin Cash have likely resulted in almost total losses.

As a result, reports indicate that Bitmain has completely wiped out dismissed its Bitcoin Cash development team, including individuals who were onboarded only days prior. This suggests that higher-ups might have decided to dismantle the department without notifying the hiring managers.

Read: Beginner’s Guide to Bitcoin Cash

CEOs to Step Down?

There is an unconfirmed report reported in the Chinese news source Odaily, which claims that Bitmain's current dual CEOs are on the brink of being replaced. The report further implies that their successors might share the surname Wang.

It's important to remember that these claims remain unverified, and the CEOs have not yet addressed these rumors. In fact, CEO Jihan Wu has been notably silent on Twitter since December 2 of this year, aside from retweeting two updates, the most recent of which happened almost two weeks ago. While this doesn't conclusively prove anything, Wu's lack of denial could be significant.

A World Without Bitmain

Currently, Bitmain continues to be operational. It still accepts orders for mining hardware and likely maintains some mining operations at one or more of its facilities inside or outside China.

However, let's entertain the notion—what if Bitmain were to shut down entirely?

Should Bitmain close its doors, the impact on cryptocurrency ecosystems could be substantial. First, the removal of a major ASIC miner supplier could affect both the availability and pricing of such devices in the market.

Additionally, ceasing all of Bitmain’s mining activities would have significant repercussions for a plethora of cryptocurrencies, especially Litecoin Bitcoin Cash along with, of course, bitcoin. The sudden drop in hash rate could make smaller networks more vulnerable to 51% attacks if other miners don't step in to fill the gap.

Conversely, if Bitmain's exit leads to lower hash rates, this would in turn decrease mining difficulty, potentially drawing back smaller or individual miners.

Bitmain isn't the sole manufacturer of ASIC miners. Several other competitors have emerged, and there's even a real chance that Intel could get involved they'll make waves in the mining arena; however, the exact form or direction remains to be seen.

Here's the crux of the matter—without Bitmain, the world of cryptocurrencies would undergo significant change. It's entirely possible that Bitmain is merely experiencing a temporary downturn and might rebound within months. This is especially valid if crypto asset prices cryptocurrency prices start to climb again steadily. Conversely, this could also be the onset of Bitmain’s irreversible decline. Time, it seems, holds the ultimate verdict.