Leaked Bitmain Pre-IPO Documents Show A $299 Million Loss in BCH Crash
Of late, a leaked Bitmain pre-IPO report is circulating over the internet. The report expose many risky issues of Bitmain that causes much concerns from the crypto mining community.
According to Finace Magnates, the documents were translated by BitMEX, a Seychelles-based BTC/USD mercantile exchange. The exchange says they “have reason to believe the authenticity of these document”.
Bitmain reports the net assets of $2.6 billion, however some people believes that Bitmain lost $600-700 million in Q2 due to its massive $1.24 billion USD in inventory which shows the issue of overproduction.
The documents indicated that the company’s cryptocurrency holding value has dropped from $1.7 billion to $823 million from March 2018 to late Ausgust. People are also concerned about its BTC holdings on market.
According to its financial report, as of December 2017, Bitmain held about 841.8k BCH and 36.8k BTC. However, based on the pre-IPO document, the firm used 67% of its 2017 cash flow to purchase more BCH and as of now, Bitmain holds $558.7 million worth of Bitcoin Cash and $153 million in Bitcoin and $558.7 million worth of Bitcoin Cash that is approximately 6 percent of BCH in circulation.
As bitcoin core developers disclosed the BCH vulnerability, BCH price dropped a lot and leaded to a significant loss in Bitmain’s balance sheets. According to BitMEX’s report, the price crash of Bitcoin Cash has caused Bitmain to lose $299.2 million USD.
The report also indicated that, Bitmain’s mining revenue also drops and the mining rewards will only get smaller in the future. Bitmain owns two mining pools, the BTC.com and Antpool, have mined controls 48% of computing power. However, Bitmain’s mining operation only accounted for 3.3% of its revenue in Q1 2018 while its revenue from other areas increased far more.