Bitmain left and right workers were hemorrhagic, in response to the market that continues to decline. In light of the most recent round of layoffs, there is a chance that this could be bad news for Bitcoin Cash and Litecoin, according to Kyle Samani. Samani is a well known investor in the crypto industry.
This venture capitalist brought on Twitter to shed light on some rumors that the Bitcoin mining company is running out of funds that will allow it to continue with the mining and blockchain progress. The Chinese company, as a result, has undergone a downsizing, and it is possible that they end up downloading the cryptography they hold, which means that a lot of Litecoin and Bitcoin Cash would have been sold at one time.
Samani's tweet reissued a comment by Samson Mow, who said that there is a risk that Bitmain will look at 85% of its dismissed employees, rather than 50% who support. In response, Samani said,
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
The theory of which Samani speaks Bitmain it is based on an alleged financial report released several months ago. Although the validity is discussed, this report states that Bitmain was in possession of 931,000 Litecoin and 1 million Bitcoin Cash at the time. With the current exchange rate, this means that they hold $ 28.6 million in LTC and $ 177 million in BCH. So far, there has been no confirmation or rejection by Bitmain in these companies.
In the report, there are more other digital resources that Bitmain appears to own, or about $ 316 million in these reserves. Bitcoin, Dash and Ethereum account for over $ 110 million of these reserves, assuming that Bitmain has not sold any of them yet.
Currently, there are some certain changes. First of all, Bitmain let go of the entire team that runs Copernicus, who was working on creating a new Bitcoin Cash client. This happened shortly after Bitmain decided to line up with Bitcoin Cash ABC during the hash war. Again, even if Bitmain has not confirmed anything, the fact that they put their mining support behind this could be the root of millions of dollars in losses. To make matters worse, Bitcoin Cash has seen a 60% decline in its value since November.
A Twitter account known for its negative posts, BCTKING555, says the company claimed to have lost $ 740 million in the third quarter, not counting the losses incurred by the fork. Claiming the details came from public information, BitMEX Research claimed that Bitcoin Cash probably reported similar losses in the second quarter, leading to a lack of stability.
Although there is a possibility that layoffs can manage the flow of funds outwardly in the short term, the company seems to look at the Hong Kong IPO as a way to support itself. However, the encrypted exchange in Hong Kong is not ecstatic about the current state of cryptocurrency, which means that there is a possibility that the IPO will not be approved.
Next step for the company, Bitmain may have to seek the assistance of venture capitalists for additional funds. However, there is also the possibility that the sale of their digital resources can keep them above water. After all, Bitmain currently holds over 60% of the entire mining market.