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According to various reports, the Bitmain encryption giant is running out of funds. And it could be bad for Bitcoin Cash and Litecoin.
$ 315.5 million worth of Crypto-Assets
Kyle Samani, the co-founder of Multicoin Capital, a cryptographic fund, warned in a tweet that Bitmain would liquidate its crypto-assets to accumulate fiat funds for its commercial operations. The eminent analyst cited recent media reports that accused the Beijing company of firing half of its staff. Among the dismissed – as reported – c & # 39; is a team that was working on the development of a Bitcoin Cash client.
This is extremely bearish for BCH and LTC
The only reason to make such drastic cuts is because you're running out of money
In the meantime, they still have 1 BCH and 1M LTC on their balance sheet. These will soon be liquidated to keep the lights on https://t.co/kneSRcK2li
– Kyle Samani (@KyleSamani) December 26, 2018
According to a financial document leaked Bitmain currently holds 930,932 LTC (~ $ 28.6m), 1.021.316 BCH (~ $ 176.7m), 22.082 BTC (~ $ 83.3m), 312.424 DASH (~ $ 26m) and 1.097 ETH (~ $ 142k) token. At the time of printing, the fiat equivalent of Bitmain's cryptographic asset portfolio is approximately $ 315.5 million.
If Bitmain has already cashed or not part of its cryptographic portfolio, it could not be found. But, according to Samani, the fact that the Chinese mining crypt contains a large number of digital currency reserves leads to a possible sales scenario. This, of course, is only possible when Bitmain feels short of money despite having fired half his workforce.
Bitcoin is under selling pressure?
Bitmain, like any other retail investor in cryptographic space, would be less inclined to discharge its Bitcoin reserves, mainly because it is among the few cryptographic resources that look to a promising future as the new year comes into play.
The same could be said about Bitcoin Cash, which Bitmain has wholeheartedly supported during the November "hash war". But from the firing of the Bitcoin Cash development team, Bitmain's probability of retaining its Bitcoin reserves is poor.
Then again, layoffs are in themselves a kind of bullish indicator: a company practices downsizing when it wants to govern its spending against its revenues. Bitmain, like any other encrypted company, has launched new products driving the cryptic euphoria of late 2017. But with the evaporation of demand for its product line, in particular the encryption chips, the company had to redefine its priorities in the hope of surviving the most depressive phase of the crypt.
What's next?
Bitmain could also choose to seek further capital without spending many brains in the sale of their crypto-reserves. The company has already shared its plans to become public through a $ 12 billion IPO round in Hong Kong. Just recently, its application in Hong Kong Exchanges and Clearing Limited (HKEX) has met with the possibility of refusal. The company could file another IPO prospectus in the future after resolving its infrastructure, starting with a redundancy already in place.
Bitmain raised $ 400 million from a pre-IPO funding round led by Sequoia Capital. The company currently holds a 67% stake in the bitcoin mining equipment market and provides about 60% of the entire mining power calculation.
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