In January, it was rumoured that Jihan Wu was to be replaced as CEO of Bitmain. This news has now been confirmed, as well as the news that Bitmain’s IPO has been delayed. The start of the year has not been kind to Bitmain and Jihan Wu, but what’s next for both?
How the mining giant Bitmain has fallen seems clear. This once behemoth of the space backed the Bitcoin Cash hard fork which has since gone on to plummet in value. Large holdings of BCH coupled with the drastically falling prices of cryptocurrencies means profits have been dramatically reduced.
Bitmain and Jihan Wu have an uphill battle
The orchestrator of Bitmain’s fall from grace is Jihan Wu himself. Now, having been pushed out of his own company, it remains to be seen what Jihan Wu gets up to next. If the rumours are to be believed, there are many investors who were promised an IPO at $18 billion. But now there doesn’t appear to be an IPO at all.
Sources have suggested that lawsuits could follow.
Bitmain itself is portraying this as having “enabled us to innovate faster and optimise and streamline our business to rally behind our vision – contributing and enabling the internet of money.”
It goes on to state: “With these operational changes now in place, the priority for this year is to double-down on innovating for and serving our customers.”
Whether Bitmain’s reputation will ever recover in the eyes of the cryptocurrency industry is another complexity however.
Even with the removal of Jihan Wu, the lack of trust within the industry towards Bitmain will surely be hard to repair. Many cryptocurrencies have rebuffed the use of Bitmain’s miners on their blockchain for fear of centralisation.
Despite the positivity coming from Bitmain’s recent blog post, both the company and Jihan Wu are in what appears to be turmoil and recovery looks unlikely.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.