Last week, cryptocurrency giant Bitmain let it’s initial public offering (IPO) lapse without being heard, signaling the first failure by a major blockchain company to be listed on a stock exchange. The development has led many to ask what it means for the future of the embattled chip manufacturer.
Bitmain co-founders Jihan Wu and Micree Zhan have now stepped down as joint CEO’s, to be replaced by former Director of Product Engineering Haichao Wang. Rumors regarding the potential change have been circling the cryptocurrency community since December 2018, when Wang began taking on CEO duties. Further rumors suggested that infighting amongst the two founders regarding the development of Bitcoin Cash (BCH) technology is what led to the split, however, these rumors are unsubstantiated.
Bitmain has assured customers that this is not the end of its IPO dreams, and the firm intends to reinstate its application in the near future. While the failed IPO doesn’t bode well for the company, it believes the saga has led to improved financial transparency and hopes to garner further trust from investors going forward.
Soon after the IPO was announced in September last year, details regarding Bitmain’s assets and holdings were released that suggested huge losses in Q3 of 2018. This news, coupled with a severe market downturn in late 2018, put pressure on the company that resulted in internal troubles and layoffs. Vocal Bitmain critic and Blockstream CEO Samson Mow tweeted at the time: “Bitmain has quietly laid off their entire Copernicus team (#Bcash GO client). Only 1 week notice. Some had just joined the company.”
Bitmain remains positive about the future though, with a recent announcement that it will soon release new Bitcoin miners the S17 and T17, which both feature its much-anticipated 7nm chips. While demand for mining equipment is currently very low due to a prolonged cryptocurrency bear market, Bitmain hopes next year’s Bitcoin halving will revive the market. ‘Halving’ is a process hard-coded into the Bitcoin algorithm which halves the mining reward every four years in order to limit total supply. Historically, the cryptocurrency market has enjoyed significant gains following a halving event.