Bitmain recently made the news with reports stating 700 employees could be laid off by the mining giant. The mining giant recently confirmed that “staff adjustments” are underway.
Bitmain employees have confirmed that over 50% of the staff will be laid off, but Samson Mow from Blockstream suggests the layoffs could go as high as 85%.
Samson Mow Tweeted:
Reports in China are now saying that Bitmain layoffs are likely to be as high as 85%, not 50%. All non-essential business units are cut. Teams working on AI initiatives are decimated. #BitmainIPO https://t.co/wOrfUYukpg
— Samson Mow (@Excellion) December 26, 2018
Kyle Samani of Multicoin Capital (Crypto-Fund) in a tweet warns that Bitmain might liquidate its Cryptocurrency assets for fiat funds to keep itself operational. He went on to add that the massive layoffs might be a sign that Bitmain might be out of cash.
“This is extremely bearish for BCH and LTC. The only reason to make cuts this drastic are because you’re about to run out of cash. Meanwhile, they still have 1 BCH and 1M LTC on their balance sheet. Those are going to be liquidated soon to keep the lights on.”
Bitmain’s leaked document shows its Crypto holdings as follows: 930,932 LTC (~$28.6m), 1,021,316 BCH (~$175.7m), 22,082 BTC (~$84.3m), 312,424 DASH (~$26m), and 1,097 ETH (~$142k).
A majority of its holdings is in Bitcoin Cash (BCH) and Bitcoin (BTC) followed by Litecoin, Dash and Ethereum. The company might be forced to sell off some of its Crypto holdings as they run out of cash.
According to Kyle the only reason why Bitmain is laying off its employees is due to a cash crunch, even though the company might be able to sustain for a while due to the layoffs eventually it has to liquidate its Crypto holdings. Litecoin and Bitcoin Cash (BCH) are probably going to get liquidated first which will add a selling pressure on the market.
This was evident during the hash wars between Bitcoin ABC (BCH) and Bitcoin SV (BSV) where BCH lost 50% of its value overnight and the entire Crypto market crumbled under selling pressure.
Massive Layoffs are happening across the Cryptoverse. It’s not like they are running out of cash anytime soon but selling off their crypto-assets might be the only way they remain operational.
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