Bitmain, the embattled Chinese cryptocurrency company that is currently the leading Bitcoin mining equipment manufacturer and operator of one of the largest Bitcoin mining pools seems to be going from bad to worse. The company has had a particularly rough towards the end of the year 2018. Starting with a failed IPO attempt to list publicly with the Hong Kong Stock Exchange (HKEX), then came the sacking of more than 50% of its global team and the closure of its Israeli research and development center. This week, Bitmain has suspended its operations in the town of Rockdale located east of the city of Austin, Texas.
According to reports, Bitmain is not completely suspending operations but more like scaling down and relaunching its operations in the Texas branch. The company is cutting loose 10 of its employees in this branch leaving behind only five. In its initial plans when opening the plant back in August 2018, Bitmain was planning on investing $500 million into the plant within a period of 7 years. The company also promised to create jobs positions for at least 400 locals. At the time of this announcement, Bitcoin cryptocurrency was trading at around $8,000. The months that followed saw the leading cryptocurrency lose more of its value through December 15th when it hit its yearly lows of $3,200.
Residents of Rockdale are not happy about the turn of events and they are urging Bitmain to solve its financial woes soon and deliver on their promise.
Steve Young, a Judge with the Milam County who spoke to TPR news media said:
“I’m really disappointed because we had advertised this. We had waited for this. We had wanted this. We had welcomed this. […]This was huge, we need some positive news here. We need some jobs here. We need a tax base here and this was a step in the right direction.”
For a company such as Bitmain that is solely dependent on the success of Bitcoin, the bear market hasn’t been especially gentle. Investors of the company have felt that the blame should certainly be placed upon the executive who has thus been suspended together with a majority of the staff. Jihan Wu and his fellow co-CEO Zhan Ketuan have reportedly stepped aside and let in Wang Haichao, an executive from Beijing-based semiconductor company called Availink to replace them. Moving forward, it seems only a trend reversal of Bitcoin’s price could save the company from total closure. The company is still quite influential in the cryptocurrency space and its downfall could usher in a new wave of further price slump not just for Bitcoin but the cryptocurrency industry in general.