Bitmain’s Bitcoin Cash gamble has failed, and the result is ouster of CEO Jihan Wu and Co-CEO Ketuan Zhan. New replacement is likely to be announced soon.
There’re gambles, and then there’re very dangerous gambles. Bitmain Founder Jihan Wu’s Bitcoin Cash gamble falls in the latter territory because its consequences coming out now are telling how catastrophic it has been for the company. Not only there’re rumors of the company filing for bankruptcy within 2019 itself, but also Jihan Wu and Ketuan Zhan, who was running Bitmain with him as co-CEO, are being replaced from their Directorial positions by company’s Board of Directors.
The news was first broken by Chinese news site South China Morning Post (SCMP). According to its report, both Jihan and Zhan had severe disagreements on critical issues as they steered their company to emerge as the largest force in Bitcoin mining space. The report states that there had also been disagreements on Wu’s extraordinarily dangerous bet over Bitcoin Cash – while Wu wanted to convert a majority of company’s mined Bitcoin into Bitcoin Cash, Zhan was against the decision. However, Wu had his say and almost all of the Bitcoins mined by the company were converted into Bitcoin Cash in hopes of better ROI. However, what has happened to Bitcoin Cash is known very well by everyone. We had also run a different report a few months back disclosing how large was the pile of BCH at which Bitmain was sitting.
Now, as you can imagine, after company screwed up its BCH gamble, Wu came immediately under intense criticism. As soon as it was realized in the bear market that BCH is only going to decline, all guns were pointed at Jihan. He tried one last thing to save the company from a severe cash crunch – an IPO. But sources tell SCMP that even company’s IPO hasn’t been able to avert the upcoming financial crisis.
As a result, the company entered a leadership transition period last month itself. The transition is now about to complete, though no deadline has been declared. Haichao Wang, company’s Engineering Director, is the front-runner for the top job.
Now, whoever is appointed the boss of Bitmain at this point will have a critical job to accomplish. While the company has not released its financial report for the most recent quarter, sources of Bitcoinist magazine have told it that the company is going to report a net loss of $740 million. Bringing the company out of this death spiral won’t be an easy task, no matter who gets the top job. Such huge losses, when there’s a serious dearth of assets (all assets are Bitcoin Cash – and they can’t be redeemed without crashing the market), can be deadly.
Let’s see who is appointed the next CEO of Bitmain and how he spearheads the company through this financial crisis.