Bitmain Co-Founders Relinquish Power After Catastrophic Bitcoin Cash (BCH) Investment, Drop in Mining Sales, and IPO Bust



Bitmain is the largest manufacturer of cryptocurrency mining equipment in the world, and it has been taking the brunt of the mining downturn associated with the continuing bear market.

Two weeks ago, [Bitmain announced it would be firing more than half of its 3,000 employees]( Now, it has been revealed that the co-founders of Bitmain, Jihan Wu and Micree Zhan, are stepping down, [and it appears Wang Haichao will be the new CEO](

Wu and Zhan will stay on as co-chairs, meaning they will stop being involved in day-to-day activities, but major decisions will have to be approved by them. This unexpected shift in power is perhaps the result of the triple failure of the Bitmain IPO not happening, Bitmain’s investment into Bitcoin Cash (BCH) turning into a big bust, and the overall crash in the crypto mining industry, which has caused sales of Bitmain’s mining equipment to dry up.

Bitcoin’s (BTC) hash rate peaked near 60 EH/s in August, September, and October 2018, [before rapidly declining to as low as 32 EH/s in December]( This indicates that up to half of all Bitcoin mining rigs were shut off at a point due to lack of profitability, which further suggests that cryptocurrency mining rig manufacturers like Bitmain probably saw their sales dry up and were stuck with huge inventories of rigs they could not sell. Essentially, the very lifeblood of Bitmain has been cut off.

It gets worse. Bitmain dumped most of its Bitcoin (BTC) to buy Bitcoin Cash (BCH) and had amassed [over one million Bitcoin Cash (BCH) by the end of March 2018]( On New Years Day 2018, Bitmain already had 842,000 Bitcoin Cash (BCH) [when Bitcoin Cash’s price was $2,500](, corresponding to a total investment of $2.1 billion.

Since Jihan Wu was an avid supporter of Bitcoin Cash (BCH) during the fork in November 2018, it’s possible that Bitmain held onto their stake in Bitcoin Cash (BCH) all the way through the fork, which would mean they have lost $2 billion. The potential losses from Bitmain’s Bitcoin Cash (BCH) investment [far exceed the $952 million profit reported in 2017](, which was probably by far their best year.

Bitmain received at least $400 million of “pre-IPO” investments in 2018, and this cash and all of their previous profits appears to have been burned through, considering that they are laying off over half of their employees, entire divisions are being shut down, and now the CEOs are stepping down. This was likely precipitated by sales drying up and the catastrophic Bitcoin Cash (BCH) investment failure. Now it appears [there will be no IPO]( according to an announcement by Hong Kong regulators, which is no surprise considering Bitmain’s dire straits.

It is no surprise that Bitmain is opting to change its leadership as seen with the stepdown of Wu and Zhan. Bitmain started as a massive crypto success story under their leadership, but clearly, Bitmain’s strategy in 2018 has nearly destroyed the company.

View Source

View Reddit by turtlecane

Daily Market Analysis: Bitcoin Falls To $4,000; Ethereum (ETH), Bitcoin Cash (BCH), EOS (EOS), and Litecoin (LTC) Drop 3 to 4 Percent



The [price of Bitcoin (BTC)]( has been steadily declining today and is crossing through the $4,000 level as of this writing.

Jan. 6 saw strong price action for Bitcoin, with the price rising from $3,800 to $4,090 on Bitstamp, puncturing the $3,900 resistance level. This rally was caused by a short squeeze simultaneous [with Bitfinex’s announcement that it would be closing for a period of time]( due to server migration.

Essentially, when this news broke yesterday, some short sellers closed their positions on Bitfinex, and closing a short position inherently requires buying Bitcoin. As shorts closed, Bitcoin’s price began to rise, causing more shorts to close, and so on and so on until Bitcoin had risen nearly $300.

The gains from the short squeeze rally are slowly being lost, and it is possible that Bitcoin will cross back below the $3,900 resistance level.

If the market was favorable for a rally, the short squeeze on Jan. 6 should have been enough to initiate it, but it seems there is strong downward pressure overall.

This downward pressure is perhaps due to Bitcoin futures traders on the Chicago Mercantile Exchange (CME). [Futures contracts expirations on CME have been shown to have a significant impact on the Bitcoin market]( In fact, it seems each month is defined by whether CME futures traders have gone long or short on Bitcoin.

The latest CME futures expiration was Dec. 28. In the below Bitcoin price chart, that expiration is quite visible with a sudden crash right before expiration, which is likely “banging the close,” in which futures traders crash the spot price of an asset right before expiration to increase short profits.


After the expiration, Bitcoin was near $3,900, and this is possibly where CME Bitcoin futures traders took out short positions, especially since it was a strong resistance level that was approached but not breached through Jan. 5.

The short squeeze did break the $3,900 resistance level, but if CME Bitcoin futures traders truly did short from $3,900, it would be expected that Bitcoin will again drop below $3,900.

**Other Major Cryptocurrencies Generally Declining More Steeply Than Bitcoin**

Today is certainly a down day for Bitcoin, but other cryptocurrencies seem to be doing worse. The total cryptocurrency market cap [has declined $3 billion today]( This has been led by Ethereum (ETH) which is down 4 percent to $151, Bitcoin Cash (BCH) which is down 3.5 percent to $161, EOS which is down 4 percent to $2.76, and Litecoin (LTC) which is down 4 percent to $37.70.

Today’s Litecoin (LTC) and Ethereum (ETH) losses follow a month of serious gains. Litecoin (LTC) is up $14 (58 percent) and Ethereum (ETH) is up $70 (84 percent) in the past month.

The current fall in Ethereum’s (ETH) price may be partially due to the overall market trend, but may also be [spillover from the 51 percent attack on Ethereum Classic (ETC)]( The price of ETC has declined 10 percent since news of the 51 percent attack broke today, slashing $60 million from the market cap.

The debate over the cause of the 51 percent attack, which may have been ETHash ASICs, has led to an outcry in the Ethereum community to ban ASICs [in the Constantinople hard fork]( The fork is less than 10 days away, and perhaps this is the beginning of a long battle in the Ethereum space between miners and developers. Ethereum Classic (ETC) will likely see heavy losses in the short term, and Ethereum (ETH) may be dragged lower with it.

The next day may see more losses for Bitcoin and other major cryptocurrencies if Bitcoin heads back to the $3,900 resistance level and below, the level where CME Bitcoin futures traders possibly took out shorts.

View Source

View Reddit by turtlecane