In early February, cryptocurrency mining giant Bitmain found itself at the center of conflicting headlines. On one hand, rumors of large-scale layoffs sent ripples through the industry; on the other, the company unveiled its second-generation 7nm mining chip, signaling ongoing technological development. However, despite these advancements, its long-anticipated Hong Kong IPO appears increasingly unlikely.
Layoff Speculation Denied by Company
On February 19, reports surfaced claiming that Bitmain had completed a significant round of staff reductions across multiple business lines, including blockchain, artificial intelligence (AI), and semiconductor development. The AI division—once seen as a strategic growth engine—was reportedly hit hardest.
This marked the second time since late 2018 that such rumors had emerged. Back then, Bitmain acknowledged internal restructuring but framed it as a routine adjustment aligned with shifting market conditions.
This time, the company pushed back firmly. In response to inquiries from 36Kr, Bitmain stated: “The external rumors are inaccurate. At the end of 2018, Bitmain made normal personnel adjustments based on business development needs. There have been no new organizational changes recently, and we remain open to welcoming talent from all fields.”
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Technological Advancement: Launch of BM1397 Chip
On the same day the layoff rumors circulated, Bitmain announced the release of its next-generation 7nm mining chip, the BM1397. According to official specifications, the chip achieves an energy efficiency ratio as low as 30J/T, representing approximately 28.6% improvement over its predecessor. Designed for SHA256-based cryptocurrencies like Bitcoin (BTC) and Bitcoin Cash (BCH), the BM1397 will power the upcoming Antminer S17 and T17 series.
This launch underscores Bitmain’s continued commitment to maintaining leadership in mining hardware innovation—a critical factor in an industry where efficiency directly impacts profitability.
The company first introduced its 7nm mining technology in September 2018. Since then, it has worked to refine performance and yield rates amid declining crypto prices and shrinking mining margins.
Leadership and Operational Shifts
Earlier in January 2019, Bitmain confirmed the closure of its Amsterdam office, part of broader efforts to streamline international operations. Additionally, co-founders Wu Jihan and Zhan Ketuan stepped down from their roles as CEOs—an executive change the company declined to elaborate on.
Bitmain also dismissed claims that it was selling off inventory at steep discounts. However, market data revealed that first-generation 7nm miners were being sold at markdowns of up to 57%, suggesting weak demand amid bearish market conditions.
According to its 2018 prospectus, mining hardware accounted for 94.3% of total revenue—$2.684 billion in just six months ending June 30, 2018. Frost & Sullivan analysis positioned Bitmain as the world’s largest ASIC-based cryptocurrency miner by revenue, capturing 74.5% of the global market share in 2017.
Today, Bitmain claims it still holds around 70% market share in mining equipment and reaffirmed its focus on core technologies in blockchain and AI through continuous R&D investment.
Market Downturn and Business Transformation Efforts
The sharp decline in cryptocurrency prices throughout 2018—Bitcoin alone lost over 70% of its value—significantly reduced mining profitability. As block rewards diminished and electricity costs remained fixed, many miners scaled back operations or exited entirely, leading to sluggish demand for new hardware.
Faced with this reality, Bitmain began exploring diversification into AI chips as early as mid-2018. The vision was to leverage its expertise in high-performance computing to enter data centers, edge computing, and smart devices markets.
While promising in theory, transitioning from a dominant position in crypto mining to a competitive AI landscape proved challenging. Unlike mining hardware—where success hinges on speed and efficiency—AI chip adoption depends on software ecosystems, developer support, and integration with existing infrastructure.
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Hong Kong IPO Dreams Fade
In September 2018, Bitmain submitted its IPO application to the Hong Kong Stock Exchange (HKEX), joining peers Canaan Creative and Ebang International in seeking public listing.
However, HKEX Chairman Charles Li made comments during the World Economic Forum in Davos that cast serious doubt on the viability of such listings. He noted that none of the three major mining firms—Bitmain, Canaan, or Ebang—met the exchange’s “listing suitability” criteria due to concerns over business model sustainability, volatility of crypto markets, and lack of profitability beyond speculative cycles.
With both Canaan and Ebang’s applications lapsing without approval, Bitmain’s path to going public in Hong Kong now seems all but closed.
Strategic Outlook: Can Bitmain Reinvent Itself?
Despite setbacks, Bitmain continues to invest in R&D and maintain a strong foothold in the mining ecosystem. Its ability to deliver cutting-edge chips like the BM1397 demonstrates technical resilience. Yet long-term success depends on more than hardware superiority—it requires sustainable revenue diversification and regulatory acceptance.
The company's dual focus on blockchain infrastructure and AI innovation remains ambitious. But without clear progress in non-mining ventures or a rebound in crypto markets, investor confidence may remain tepid.
As the industry evolves toward institutional adoption and greener consensus mechanisms (e.g., proof-of-stake), even efficient proof-of-work mining faces existential questions.
Frequently Asked Questions
Q: Is Bitmain still a major player in cryptocurrency mining?
A: Yes. Despite rumors and market challenges, Bitmain maintains approximately 70% global market share in ASIC-based mining hardware and continues to release competitive products like the Antminer S17 series.
Q: Why hasn’t Bitmain gone public in Hong Kong?
A: The Hong Kong Stock Exchange has expressed concerns about the sustainability and volatility of crypto-related business models. None of the major mining firms—including Bitmain—have met the listing suitability requirements.
Q: Did Bitmain really lay off employees?
A: While restructuring occurred in late 2018, Bitmain denies any recent large-scale layoffs. The company describes past adjustments as normal operational optimization rather than crisis-driven downsizing.
Q: What is the significance of the BM1397 chip?
A: The BM1397 improves energy efficiency by nearly 29% compared to previous models, making it one of the most power-efficient SHA256 mining chips available—a key advantage in cost-sensitive mining environments.
Q: Can Bitmain succeed in AI if crypto fails?
A: While technically capable, success in AI requires ecosystem development beyond hardware. Competing with established players like NVIDIA or Qualcomm presents significant hurdles in software support and market access.
Q: Are crypto mining companies still relevant?
A: Yes—especially in regions with low electricity costs. Mining remains essential for securing proof-of-work blockchains like Bitcoin. However, long-term relevance depends on innovation, sustainability practices, and adaptability to regulatory landscapes.
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Final Thoughts
Bitmain stands at a crossroads. Its engineering prowess keeps it at the forefront of mining technology, but external pressures—from market downturns to regulatory skepticism—threaten its broader ambitions. Whether it can successfully pivot into AI or find alternative paths to public listing remains uncertain.
For now, Bitmain’s story reflects a larger narrative within the crypto industry: innovation thrives even in adversity, but scalability and legitimacy require more than technological edge—they demand trust, transparency, and long-term vision.
Keywords: Bitmain, cryptocurrency mining, ASIC miner, BM1397 chip, Bitcoin mining, Hong Kong IPO, mining hardware, AI chip development