Support Bitcoin Cash can be costly for Bitmain

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Support Bitcoin Cash can be costly for Bitmain

At the weekend we reported that mining giant Bitmain might face challenges with the upcoming IPO on the stock exchange of Hong Kong.

In one of the slides of the public presentation of the company in preparation for IPO, it was shown that the assets of Bitmain bitcoin has declined from 71 to 560 082 BTC 22 BTC from December 2016 to the first quarter of 2018. During the same period, the company’s assets in Bitcoin Cash (BCH) has increased to more than 1 million pieces.

Samson MOU, the Director of security in Blockstream, said that Bitmain has suffered half a billion dollars in losses through their savings in the BCH for the last three months and decided not to disclose financial figures for the second quarter. The company showed $1.24 billion in the first quarter of 2018, but did not mention any figures for the second quarter (showed preliminary figures for the third). MOU suggested that the second quarter was lowered because the company probably realized the scale of its losses — $600— 700 million

In a recent post on Medium blogger under the pseudonym Crypto Herpes Cat noted that these losses and the lack of transparency around reporting of the company can greatly affect the upcoming IPO.

Why is it important

All of this can upset potential and current investors Bitmain, although the latter, despite the recent losses, continue to support the company.

Vijay Boyapati, programmer at Peach and cryptologi, expressed an informed opinion that Bitmain made one of the worst deals in 2017, when he decided to support Bitcoin Cash instead of bitcoin. He argues that the company is sitting on such a large reserve of cryptocurrency, “is not able to get out of their billion dollar positions in the BCH without full collapse of the course”.

As the data show presentations, Bitmain can store 5% of the total kamineni BTH (in the background of the rapid fall in the value of this Aldona). Given the volatility of the market, any large holder of any cryptocurrency can not “unload” a large number of coins without serious impact on price, and, given such large assets in BTH, Bitmain can take the risk Pampa course. The consequences of this is likely to be very bad.

In other business Bitmain is running out competitors such as GMO, Avalon and Ebang, who began to release more efficient asik. The General decline in demand for miners in the face of the prolonged bear market has led to the fact that Bitmain, the largest company in the manufacture of equipment for mining bitcoins, suffered significant losses. For example, Antminer S9, the most popular asik of the company, which recently sold for $3500, now on sale for 700 (80% “discounts”).

Most of the profits Bitmain brought last year’s growth of bitcoin, which grew along with interest in mining, but after the fall of the main cryptocurrency 70% from record highs, the demand for asik is also decreased.

Several rounds of investment in 2017 and 2018 showed the company’s valuation at $12 billion, and the estimate Bitmain before the IPO amounted to more than $40 billion According to Crypto Cat Herpes, since the evaluation Bitmain was obtained from speculative business strategies of the company, the IPO could be a way to sell part of the assets on the basis of scores obtained during a bull market.

As Bitmain has been in the same situation

Support for Bitmain Bitcoin Cash Aldona became evident almost immediately after the fork in August of last year. Jihan Wu, the CEO and co-founder of Bitmain, stood on the side of the defenders of Bitcoin Cash, under the leadership of Roger Faith.

Fork Bitcoin Cash was actually initiated by Bitmain, when mining pool, the company ViaBTC, mined the first blocks Aldona. ViaBTC and other pools Bitmain supported by BTH since its creation, accumulating a huge number of cryptocurrencies in addition to the one that Bitmain received at the time of the fork. The Chinese giant has also invested heavily in projects that support the BTH.

According to the materials of Bitcoin Magazine

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