Bitcoin Mining giant, Bitmain, in deep debt, CSO of Blockstream gives proof

Things are not looking well for the one time most valuable cooperation in the cryptocurrency space. Bitmain, the former mining giant may be in deep debt, according to Chief Strategic Officer of Blockstream, Samson Mow.

In a series of tweets, Samson Mow explained about the troubles going on with Bitmain. According to him, one of the major concern is regarding multiple lawsuits that are being targetted on Bitmain. Moreover, their assembly, component, production, and repair companies haven’t been paid since January and due to which the number of lawsuits is piling up.

1/ Bitmain already facing multiple lawsuits and more being filed. Their assembly, component, production, and repair companies are unpaid and losing patience. Seems Bitmain is deep in debt and trying to raise new capital from unwitting investors to keep going. #BitmainIPO pic.twitter.com/fBlSulRaRG

— Samson Mow (@Excellion) March 10, 2019

Also, Bitmain’s flagship miner S17 was sold at a loss (30% loss according to Samson Mow). Bitmain is in no position to sell their miner at 30% loss. This combined with low yield production signified Bitmain may be in deep trouble.

2/ Selling the S15’s at a loss (~30% below cost) was a bad idea. The cost basis for 7nm chips is 3x that of 16nm chips. What about the new S17 50TH miner though? I’m hearing that the yield for Bitmain 7nm chips is very bad, maybe 60% are viable. Only about ~1000 S15’s were made.

— Samson Mow (@Excellion) March 10, 2019

The company recently scrapped its IPO plan, after it was revealed that their books aren’t up to date. If the IPO had happened, Bitmain would have become the most valuable company in the cryptocurrency space.

Blockmanity’s Take

The real question regarding Bitmain troubles is “What happens to Bitcoin Cash if Bitmain announces Bankruptcy?”. It is well known in the cryptocurrency circle, that Bitcoin Cash is supported by the mining profits of Bitmain.

If Bitmain was to cease operations, Bitcoin Cash value can take a serious hit, as Bitmain itself holds $1 billion worth of Bitcoin Cash. In a bankruptcy case, the assets would be dissolved to pay back shareholders and existing clients, causing Bitcoin Cash value to drop sharply.

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