The most important and well-established company in crypto space, Bitmain, may go bankrupt in coming days according to INEWS. According to the report, there are some problems being faced by the company such as regular investment in Bitcoin Cash (BCH), inventory losses, no new chips created, and no growing market for its AI branch.
The company has made profits in the first quarter of this year equal to $1.1 billion dollars. This figure is worth mentioning as Nvidia, a well-established company, reported an income of $1.2 billion dollars.
Breaking: One of the leading Chinese publications INEWS QQ today published revelation article on Bitmain: 1)massive inventory losses 2) BCH invest gone bad 3)no new chip 4) AI is insignificant 5)forced to IPO from desperation #bitmainipo Thank you friends https://t.co/yIrWa2eL5o
— BTCKING555 (@btcking555) September 14, 2018
The main loss to Bitmain is due to the holding of Bitcoin Cash, as per the report. Bitmain is a strong supporter of the hard fork of Bitcoin. But, since its all-time high, Bitcoin Cash has lost around 88% of its value.
In August, Bitmex mentioned in a report about Bitmain and its planned Initial Public Offering (IPO). Bitmain was intending to raise funds from investors by going public in Hong Kong.
There was much false news that Bitmain has plans to invest in Chinese companies like Tencent and Softbank. Later Bitmain denied about this to media.
As per Bitmex Research, Bitmain has lost almost $328 million dollars after investing them in Bitcoin Cash, losing its massive profits made in the first quarter of a year. Also, for a long time, Bitmain hasn’t launched any marvellous product in the market.
Bitmain is responsible for almost 85% of total crypto mining market, including mining pools over the internet. Bitmex also revealed that three consecutive chips of Bitmain have failed, costing hundreds of millions of dollars.
Further, there are many competitors prevailing in the market and trying to take the most important section of the market. Ebang Communication and Cannan Creative are also intending an IPO in the coming days in order to gain funding advantage.
The report by Bitmex stated
“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.”
Also due to falling cryptocurrency prices, there is a negative impact on the revenue of the company. For now, the Bitmain will have to make an effort to avoid bankruptcy. If the market starts a new bull run in near future, things would be different for Bitmain.