Cryptocurrency
As Bitcoin sinks, industry startups are forced to cut back via @TechCrunch
As reported by TechCrunch, “Around this time last year, the price of Bitcoin hit an all-time high of nearly $20,000. Cryptocurrency enthusiasts everywhere boasted about the wealth 2018 would bring, initial coin offerings exploded and startups continued to pull in record amounts of venture capital. Fast-forward one year: Bitcoin is down 75 percent to a meager $3,700, sinking as quickly as its […]
As reported by TechCrunch, “Around this time last year, the price of Bitcoin hit an all-time high of nearly $20,000. Cryptocurrency enthusiasts everywhere boasted about the wealth 2018 would bring, initial coin offerings exploded and startups continued to pull in record amounts of venture capital. Fast-forward one year: Bitcoin is down 75 percent to a meager $3,700, sinking as quickly as its meteoric rise, and industry startups are paying the price.
“The latest victim is Bitmain, a provider of bitcoin mining hardware that very recently submitted its IPO prospectus to the Stock Exchange of Hong Kong. The company confirmed to CoinDesk this week that cutbacks would begin imminently: ‘There has been some adjustment to our staff this year as we continue to build a long-term, sustainable and scalable business,’ a spokesperson for Bitmain told CoinDesk . ‘A part of that is having to really focus on things that are core to that mission and not things that are auxiliary.’
“Beijing-based Bitmain hasn’t clarified just how many of its employees will be impacted, though rumors — which Bitmain has since denied — on Maimai, a Chinese LinkedIn-like platform, suggest as many as 50 percent of the company’s headcount could be laid off. This news comes after the crypto mining giant confirmed it had shuttered its Israeli development center, Bitmaintech Israel, laying off 23 employees in the process.
“Bitmain employs at least 2,000 people, up from 250 in 2016, according to PitchBook, as the company’s growth has skyrocketed.
“‘The crypto market has undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation,’ Bitmaintech Israel head Gadi Glikberg reportedly told his employees at the time of the layoffs.
“Bitmain has raised more than $800 million in venture capital funding from Sequoia, Coatue Management, SoftBank and more. At a valuation of $12 billion, it quickly soared to become the most valuable crypto startup in the world, surpassing Coinbase, which itself garnered an $8 billion valuation this fall.
“In its IPO filing, Bitmain reported more than $2.5 billion in revenue last year, up nearly 10x on the $278 million it claimed for 2016. As for the first half of 2018, Bitmain said it surpassed $2.8 billion in revenue. These are astonishing numbers, yes, but whether Bitmain can sustain this kind of momentum has been called into question, especially as it gears up to go public in what would be the largest crypto-related IPO to date. The crypto market, by nature, is unpredictable — a characteristic that’s less than favorable to public market investors.”