Bitmain,
a manufacturer of Bitcoin application-specific integrated circuits (ASICs), has
temporarily suspended employee salary payments for September and beyond. The
move comes as the company faces financial difficulties. This includes a lack of
positive cash flow for September and a decline in orders for new ASICs.
Multiple
Bitmain employees disclosed these developments anonymously. They stated that
the firm has cut all “bonuses and incentives” for its staff. It also
imposed a 50% reduction in their base salaries. In an internal message allegedly
from Bitmain, it stated:
“For
the month of September, the company has yet to achieve a net positive cash
flow, especially in the orders of [new] ASICs. The Executive Management Team
therefore decided that salaries for the month of September will be paused, to
be reviewed after October 7 after the holiday.”
Volatility in Crypto and
Mining: Challenges Faced by Bitmain
Founded
in Beijing in 2013, Bitmain has been one of the major players in the Bitcoin
mining industry. During its peak, it held an estimated 70% market share in the
Bitcoin mining ASIC manufacturing sector. Bitmain’s Antminer ASIC series has
been a leader in terms of hash rate computations for Bitcoin mining.
The
situation at Bitmain
has raised concerns among its employees and stakeholders as the company
navigates financial
challenges.
Bitcoin
miner Hive recently announced its acquisition of 2,000 Bitmain S19 XP ASIC
miners for immediate deployment in its mining rigs. These
miners, listed at a price of $4,653 on Bitmain, are expected to contribute
significantly to Hive’s mining operations, generating an estimated $80 per
megawatt hour in revenue.
Bitmain,
once led by co-founder Jihan Wu, settled a year-long ownership dispute in 2021
with co-founder Micree Zhan. As part of the agreement, Wu resigned as chairman
and CEO of Bitmain. He sold his ownership stake to Zhan for $600 million.
Bitmain
had initially planned for an initial public offering (IPO) with a valuation of
$5 billion by late 2022. However, these plans appear to have been shelved due
to the ongoing bear market in the cryptocurrency industry.
The
pause in employee salary payments and financial challenges at Bitmain highlight
the volatile nature of the cryptocurrency and mining industries. The market
conditions can significantly influence industry players. Bitmain’s future
prospects will likely depend on its ability to navigate these challenges
successfully.
Bitmain,
a manufacturer of…
