The report adds that the main loss is due to the company’s Bitcoin Cash holdings. A strong supporter of this particular hard fork of Bitcoin, Bitmain faces the wrath as Bitcoin Cash lost around 88% of its value since its all-time high.
In August, BITMEX research report pronounced information about their Initial Public Offering (IPO). The company was aiming to raise funds from investors by going public in Hong Kong. Rumors suggested that companies such as Tencent and Softbank were investing in Bitmain, but everything was denied by the company later on.
According to BitMEX Research, Bitmain has incurred a loss of $328 million dollars after investing in Bitcoin Cash, eating up the aforementioned massive profits the company earned in the first quarter of the year. Furthermore, Bitmain hasn’t availed any new products on the market for a long time.
At its peak, Bitmain accounted for over 85% of the total cryptocurrency mining market, including the most famous mining pools on the internet. Additionally, the failure of Bitmain’s three successive generations of Bitmain chips, costing the firm several hundreds of millions of dollars.
On top of the losses, the company faces stiff competition from firms that are steadily stepping up in the space, take an important part of the market. The report released by BitMEX reads as follows:
“Once the company goes public, capital allocation decisions in this volatile and unpredictable market will be difficult enough, letting emotions impact too many investment decisions may not be tolerated.”
Attributing its bit in the Bitmain’s downfall is the falling cryptocurrency prices, which has a negative impact in the revenue of the company. Some miners were not profitable under some Bitcoin price levels. The company is making a big effort to avoid bankruptcy, a new bull run in the near future can come really handy for the firm.
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