Bitmain Lost $328 Million While Buying BCH
August 31, 2018 1:15 pm
According to the reports, BitMex recently published a press release where it mentioned Bitmain as a legendary crypto company. The report further detailed that the mining firm is in the process of launching an initial public offering (IPO).
Poor sales in Q2 has made the company face huge losses. The loss is reportedly caused by executives trading in Bitcoin Cash (BCH). The value of BCH had dipped around 80% due to the volatility of the market.
The researchers further stated:
“The figures indicate Bitmain was highly profitable and cash generative in 2017, but may currently be loss-making. Bitmain also spent the majority of its operating cash flow acquiring Bitcoin Cash and may have suffered mark to market losses of US$328 million as a result.”
Issuing Warnings on Investment
BitMex stated that Bitmain had made a number of big mistakes such as producing too many units, buying multiple altcoins based on speculations on the market. The management team also had some flaws in handling the mining firms.
BitMex revealed that Bitmain had spent 70 percent of its last year’s cash flow on purchasing Bitcoin Cash. They included that when the company goes public, the capital allocation decisions in the volatile market will become tough. Bitmain should take care of where it is investing. Otherwise, the company will face problems at the time of launching its IPO.