October 11th — Recent reports circulating on professional networking platform Maimai (similar to LinkedIn) reveal concerning financial developments at Bitmain, a leading cryptocurrency mining hardware manufacturer. Multiple employee accounts verified as Bitmain staff allege the company withheld all performance-based salaries for September and halved base wages due to cash flow constraints, with no clarity on repayment timelines.
An internal Bitmain EMT (Executive Management Team) memo titled "Notice on Temporary Suspension of Partial September Salaries for All Employees" corroborates these claims, stating:
"As of September, the company's operational cash flow remains negative, particularly due to severely delayed mining deployment progress. The EMT has decided to provisionally withhold part of all employees' September salaries, with potential payments resuming after the October 7th holiday contingent upon improvements."
The notice further emphasizes mandatory commitment from all personnel to operational goals.
Bitmain's Financial Trajectory: From Boom to Uncertainty
Historically perceived as a cash-rich innovator, Bitmain's financial strength was underscored by its 2018 B+ funding round, valuing the company at $12–15 billion. IPO documents from that year disclosed staggering metrics:
- 256,000 mining units sold in H1 2018
- 95% revenue share from mining hardware
- $743 million net profit, marking a 700% YoY growth
However, its Hong Kong IPO plans collapsed amid undisclosed challenges, compounded later by a highly publicized leadership feud between co-founders Wu Jihan and Zhan Ketuan. Their eventual resolution split Bitmain’s assets:
- Cloud mining service Bitdeer (led by Wu) spun off and achieved Nasdaq listing via SPAC in April 2023.
- Antpool became an independent entity under Zhan’s leadership.
Bitmain’s own listing ambitions remain dormant.
Industry-Wide Mining Sector Struggles
The EMT memo’s reference to "mining deployment delays" hints at weaker-than-expected ASIC miner sales—a trend plaguing the entire sector. Publicly traded peers Canaan Creative and Ebang International report parallel downturns:
| Company | Metric | Decline (YoY) |
|---|---|---|
| Ebang International | Product sales (H1 2023) | 95.24% ($1.15M vs $25.06M) |
| Canaan Creative | Q2 2023 mining hardware revenue | 75.63% ($57.9M vs $238M) |
Key Factors Driving the Mining Downturn
- Bitcoin Price Volatility: Post-2021 all-time highs, the crypto winter suppressed mining profitability.
- Escalating Mining Difficulty: Higher computational demands elevate operational costs, squeezing margins.
- Regulatory Headwinds: Global crackdowns on crypto operations deter investment and expansion.
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Expert Insights: Navigating the Crypto Winter
Zhang Xiaobing, Executive Director of Kefangde Investment, notes:
"The mining sector’s contraction stems from Bitcoin’s price slump and rising network difficulty. Profitability erosion has forced operational downsizing."
Zhao Wei, Senior Researcher at OKX Research, adds:
"Market cyclicality, intensified competition, and regulatory pressures converge to shrink industry scale. Only elite players with scale advantages may endure."
FAQs: Understanding Bitmain’s Challenges
Q1: Why did Bitmain withhold employee salaries?
A: Due to negative cash flow from delayed mining deployments and weak hardware sales, per internal documents.
Q2: How does Bitmain’s valuation compare to current struggles?
A: Despite its $15B peak valuation, operational and leadership crises have hampered financial stability.
Q3: What broader trends affect crypto mining firms?
A: Falling Bitcoin prices, higher energy/equipment costs, and stricter regulations collectively pressure profitability.
Q4: Has Bitmain recovered from its founder conflict?
A: While restructuring resolved immediate disputes, spin-offs like Bitdeer now operate independently, leaving Bitmain’s core business untested in public markets.
Q5: Are other mining companies facing similar issues?
A: Yes—Canaan and Ebang’s steep revenue declines reflect industry-wide distress.
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Editorial Note: This report synthesizes verified employee accounts, corporate disclosures, and expert commentary to contextualize Bitmain’s financial pressures within the evolving crypto-mining landscape.