Has Bitmain Sold All Their BCH?

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Chinese media is stating today that Bitmain plans to make redundant at least 700 employees in their Beijing Headquarters.

Some are stating they will fire 50% of their total circa 2,500 employees. Some give even higher numbers. Apparently they are no longer funding some BCH devs. They closed their Tel Aviv branch.

Tis a very tough time for miners. Even while price was falling for all of this year, bitcoin’s difficulty kept going up and up until recently when about 50% of BTC’s mining hash went under.

Suddenly a new unknown miner has appeared today, controlling about 25% of bitcoin’s hashrate. Making it a story as old as bitcoin itself. Old miners eventually go bankrupt or out of service, like Bitfury or BTCC. New ones appear.

How has Bitmain faired? According to the last known figures, they were doing extremely well, but that was then. Back in March or so, when the crypto market cap was still not far from a trillion. It is then when they sold about $250 million worth of BTC by our estimation, seemingly just after the leaked Bitmain finances.

Bitmain’s bitcoin wallet, December 2018.

The above tells an interesting story and a seemingly complete story for BTC as Bitmain’s finances correspond with the above tracking of Bitmain’s bitcoin wallet.

We can see in 2015 they were kind of irrelevant. It’s sort of when they entered this space as far as their business is concerned, with their hash increasing considerably and presumably their intelligence too for they kept accumulating for much of 2016.

In the second half of 2016 they perhaps got a bit scared of eth’s then meteoric rise. So their holdings dwindle, but somewhat slowly until they seemingly have a flash sale in August 2017, just ahead of the Chinese ban of crypto exchanges.

Except for a bit of a hiccup, the bitcoin markets did not care about China. Price went on to roar from $3,000 to $20,000. During that period, Bitmain started keeping all they mine by the looks of it. Then in March 2018 start selling again, now holding just about 8,000 btc. An amount that isn’t increasing much, meaning they’re probably insta-selling.

The biggest crypto miner and manufacturer, therefore, has been hodling when price goes up, and has been selling fairly quickly when price goes down.

You’d expect the reverse. You’d expect slow selling when there is increased buying and then preferably no selling when buying demand is low. Bitmain however has a trading desk as far as we’re aware so they’re acting like traders instead of producers of a product. Apparently miners even short sell now.

Bitmain’s probable Bitcoin Cash wallet, December 2018.

This tells an even more interesting story. Here, however, we’re not very sure this BCH address belongs to Bitmain, but we’re fairly sure because someone from Electron Cash apparently claimed this address belongs to an 8btc mod, which we take as code speak for Bitmain.

We can see here that Bitmain has kept all the BCH they’ve mined and they’ve even bought some, or quite a lot, with fiat or other cryptos.

That’s while price was up and up, and even for a bit afterwards. Then they hodl and hodl until June 21st or so. Some 200,000 BCH were sold at that point. Then another 270,000 or so on or around November 15th, sending this address to zero.

Bitcoin Cash price on daily candles, Dec 27th 2018.

June 21st or thereabouts is the first big candle on the above chart. We’ve highlighted November 14th because that’s when BCH’s price enters crisis mode.

November 14th was just a day before BCH’s chain-split fork. Bitinfo is stating the 270k or so moved on November 15th. The actual raw data itself is very complex for poonodes to analyze, but we wanted to at least put it out there that the funds in question may have moved so as to split the coins into BCH and BSV.

Logically that’s not a sound proposition because you don’t split or even move coins in the middle of a hashwar that never happened. We don’t know, however, so maybe.

But it appears far more likely that Bitmain just sold them. From a cynical point of view, perhaps they knew or expected price to go down. From a more reasonable view, perhaps they had no option.

The so called hashwar was perhaps unexpected by Bitmain. They were racing to turn on some 90,000 asics. That might have cost quite a bit. That cost was to be paid somehow.

There’s rumors Bitmain has suffered a loss this year of some $700 million. “Miners sold by the kilo” was trending in China. That’s a meme way of saying asics are now being turned into scrap metal.

Asics is Bitmain’s business, but their competitors have recently released far more powerful asics. Bitmain then tried to catch up with a new asics of their own, but events moved (price crashed badly).

With little new revenue coming in from the almost non existent new asics buyers, with money being burned into a hash non-war, with their 1 million BCH falling from $5 billion at the high to now not even $200 million (if they even have them at all), you can perhaps easily see why they might need to fire people.

Alleged second Bitmain Bitcoin Cash wallet, December 2018.

This is another alleged Bitmain Bitcoin Cash wallet. The story here is somewhat similar, although far shorter. They apparently were trying to get out in June 2018, at least partially. BCH’s price back then was at $1,000. A few months later, in August, it was at $500.

You’d think these funds would have been sold Over the Counter (OTC). Here in June perhaps there was less pressure, but one can imagine the circa 300,000 BCH in November would have been sold quickly.

That may be because presumably they were under pressure to get an upper hash hand. Those 90,000 asics were seemingly delayed due to whatever bureaucratic official “papers” requests. Some were suggesting they rented hash.

They may have therefore needed money quickly and in a bear market that may have meant selling OTC at a steep discount. Whatever OTC buyer may have then had an instant price premium on exchanges. So price fell and quite badly.

What has been very interesting in this BCH/BSV nonsense is the lack of trading frenzy. There was the hash trash, but, testosterone fueled kids didn’t get to play much.

Was that because Bitmain didn’t quite have any BCH left to play with? If they sold BSV, might have they not preferred to stay in fiat instead of sending that to BCH? Did they effectively sell everything?

Well, they still do have a bit of BTC. Presumably some fiat. Maybe some other crypto. And they probably do have another 100,000 BCH or so. Yet the amount of paper value that has vanished is quite astounding.

You obviously do not fire 700 people for fun and games. You do so because there may not be enough savings left. A billion or $10 billion in paper crypto value may have made one well comfortable, but with that reduced to $100 million or maybe $500 million, the comfort is accordingly reduced too.

Copyrights Trustnodes.com

 

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