Cryptocurrency mining manufacturing giant Bitmain has had its share of issues lately. The company has made claims that it had received financial support from several large financial giants, namely Japan’s Softbank and China’s Tencent, which apparently weren’t true. It was also been called out for possibly exaggerating its financial information after internal documents appeared to indicate that it couldn’t be as cash-flush as it had claimed. In absence of any response from the company, some are now wondering if the most profitable crypto mining-based company in the world could be on the verge of going bankrupt.
A report by media outlet QQ seems to indicate impending failure for the company. QQ’s INEWS section points out that Bitmain is suffering from inventory losses, a lack of new manufacturing and the dwindling crypto mining market, which has already caused Nvidia to pull back on its production and financial forecasts.
During the first quarter of 2018, Bitmain reportedly earned a profit of around $1.1 billion. This is an impressive feat by any standards, but made even more so considering the fact that Nvidia, which has been in the tech market for much longer, reported net income of $1.2 billion during the same period. That quarter paved the way for major global expansion over the summer, with Bitmain announcing that it was opening a new office in Silicon Valley in California and a new data center in Rockdale, Texas.
According to the Bitcoin Mercantile Exchange (BitMEX), Bitmain once accounted for 85% of the total market for cryptocurrency mining equipment manufacturing, and also maintained some of the largest mining pools in the world. However, not everything has gone smoothly for the company. BitMEX also indicated that the company has distributed three generations in a row of faulty chips, which have costs the firm hundreds of millions of dollars.
Bitmain has previously said on several occasions that it was preparing an initial public offering (IPO) on the Hong Kong Stock Exchange this month. However, with September now more than half over, the company has been relatively quiet on all fronts. Given the series of unfounded claims and the revelation of some level of financial instability, it is possible that Bitmain will find itself falling as quick as it rose.