[Crypto News] Crypto mining firms struggling under the current bear market climate

You know that the prolonged bear market is getting severe when even major bitcoin mining farms are going bankrupt or closing up shop. Top mining giant Bitmain are closing branches and laying off workers while Giga Watt, the biggest mining company in America, has filed for bankruptcy. The knock on effect has also dragged Taiwanese chip manufacturing giant TSMC down with it.

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TSMC may only have lost some revenue profits year on year

But Bitmain, the largest mining rig manufacturer, is losing their head. Both of the co-founders or current CEOs are stepping down. The well-known Jihan Wu, and his business partner Ketuan Zhan are to be replaced by one of the company’s other managers. With 75% of the world’s specialized mining computers coming from Bitmain, it’s a clear sign that the company is sailing troubled waters when they remove the very captains that built the ship.

Not only that

50% of the crew is also being retrenched. The entire Israel and Amsterdam branches of the company are being shut down. Amsterdam was the site of the BTC.com crypto wallet operations. Losing $700 million in Q4 of 2018 must have been the last straw. Also Bitmain’s largest American operation, situated in Austin Texas, has been suspended. The mining town of Rockdale in Austin is a cheap source of electricity, and with the coal era over the town had hit a major slump and was greatly disappointed when Bitmain had to pull out.

Many jobs were due to be created and the town would have been given a real boost by the crypto industry. From coal mining to coin mining – what an industrial revolution. Well the revolution has only temporarily been put on hodl, so hodl that thought. If only Bitmain could hodl their co-founders… They have, of course, kept a skeleton crew over there to oversee the 8000 miners and multi-million dollar renovated facility, so there is a likelihood that once the bull market returns, operations will resume.

This bear market

Is much like the ones before it in the sense “that this too shall pass”, as the Buddhists like to say. Bitcoin is cyclic and goes from booms to busts and back to booms again in the true bubble fashion. We just happen to be at the bottom of the bear phase of the cycle. Even Bitmain’s IPO, predicted to be the biggest in crypto history ($3 billion), has been denied by Hong Kong regulators. All of this could affect not only the entire crypto market as a whole but even general job creation and thus the overall economy, which is in a current bearish phase globally.

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It’s all connected at this point in time

Amazing what a mere six months and a huge 50% drop in bitcoin price can do to the industry. If that leaves you feeling disappointed, then don’t worry. Just imagine what the opposite – a 50-100% rise in bitcoin’s price - will do to the industry in the coming months when the bull run kicks in again.

Along with that we have the fifth biggest crypto mining firm Giga Watt file for bankruptcy in November last year, and some of its employees have not been paid for over six months (since July 2018). They also owe Washington state where they operated, around $300 000 for utilities payments. And the list goes on. There are numerous other crypto companies (like Huobi) who are all retrenching or closing down under the current economic pressure imposed by the bear market.

Every day a new victim falls by the wayside

Under the strain of maintaining stability or even profit when bitcoin has retraced almost 90% since the ATH. I guess it is to be expected, though certainly suggests that companies should plan ahead a bit better, knowing the nature of the product they are dealing with and its cyclic idiosyncrasies. The rest of us retailers can only really look on from the sidelines and hope the rest of the major players in the industry keep their heads above water so that we can also stay afloat in their wake.

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