Bitmain, which is the largest maker of crypto mining equipment, is facing protests over its decision to retrench half of all its employees before the BTC halving. The company is planning to implement the layoff this month.
The co-founder of Bitmain, Micree Zhan has been quite critical of the decision. It is worth noting that Zhan was edged out of the company and he no longer actively influences decision making at the executive level. He is currently fighting the decision to kick him out of the company, although the matter is still before the courts.
Micree Zhan has called the decision to fire half of all employees suicidal. He sent an open letter to the Bitmain leadership telling them they did not need to layoff so many employees. He argues that the company’s finances are great and even the laving even will not shake their profitability a great deal. Instead of firing the employees, Zhan argues that the company can expand its AI and machine learning division to boost profitability in light of dwindling fortunes in the crypto mining sector. However, it does not appear that the letter has moved the Bitmain executive team.
Optimizing its Operations
Bitmain said that it is laying off employees in an attempt to optimize employees in anticipation of Bitcoin halving. The company believes that the halving will cause crypto mining to become less profitable, which will cause demand for its mining rigs to drop. As a result, the company is scaling back most of its other operations to help them focus exclusively on crypto mining rigs.
However, the employees are not happy about it. Recently, Dovey Wan, the managing partner of Primitive Ventures, tweeted a photo showing a banner protesting the layoffs. According to the tweet, the banner reads, “Protesting against Bitmain’s illegal layoffs.” It would appear that the employees are unhappy about losing their jobs. However, they do not appear to have much say in the matter. One reason for this is that China has very weak labor laws. There is only one legally recognized trade union in the nation. The result is that employees are usually at the mercy of their employers.
What Happened To The Planned Job Growth?
Back in October 2019, Visionary Financial reported on Bitmain opening the largest crypto mining farm in Texas. When Bitmain first announced the plans in 2018 it was mentioned that they “intended to bring 400 local jobs in the first two years. As such, it had also stated its plan of investing $500 million over an initial period of seven years.” With the latest news on Bitmain, it seems like that ultimate vision has faded.
The Future of BTC after the Halving
Bitmain seems to believe that BTC prices will not be high enough after the halving. However, that decision might work against them in the future since the crypto market is so unpredictable. In the next few months, the price of BTC may be much higher than they predicted. Many bitcoin enthusiasts predict so at least, due to the fact that halvings reduce supply and essentially can make bitcoin more valuable from a supply/demand standpoint… It’s still a growing industry and a lot could still happen that no one can predict. However, it is unlikely that Bitmain will reverse course anytime soon.
What is Bitcoin Halving?
BTC halving is a predetermined event that was set when BTC was created. It entails a reduction of the BTC given to miners as a reward for successfully mining BTC by half. The next halving event is set to take place in May this year. In past years, halving has had a positive impact on BTC prices. Bitcoin halving essentially reduces supply which is why so many people label bitcoins value from it’s “deflationary model.” Bitcoin halving occurs every four years, and will continue to do so until Bitcoin is fully mined around the year 2140.
Image Source: Flickr
Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the crypto currency they discuss. The information and content are subject to change without notice. Visionary Financial and its affiliates do not provide investment, tax, legal or accounting advice. This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. All content published by Visionary Financial is not an endorsement whatsoever. Visionary Financial was not compensated to submit this article Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.
