Bitmain responds to $500 million loss: "the rumors are not true"

19 Feb, 2019 | Updated: 19 Feb, 2019
by Richard Allen
Update
Bitmain responds to $500 million loss: the rumors are not true

Reports have begun circulating that Bitmain lost around $500 million in Q3 last year as a result of the ongoing bear market. Bitmain has since responded to the claims, calling them untrue.

As per the original report, Bitmain earned around $2.8 billion in revenue for the first nine months of 2018, but only $200 million in the third quarter. In an attempt to clarify the situation, Bitmain has released a statement claiming that the original report is simply not true. The official response from the mining company is “the rumors are not true, and we will make announcements in due course in accordance with the requirements of relevant laws and regulations.”

Read more: Bitmain suffered $500m loss in quarter three of 2018

While Bitmain denies the rumors, things don’t look good if they do turn out to be true and there seems to be evidence suggesting that they might be. Crypto investor Alistair Milne, for example, explained that Bitmain marks their assets to their average purchase price. In other words, the crypto assets are only marked down once they’ve been sold which likely means that their balance sheet losses are actually far higher.

Furthermore, Twitter user btcking555 states that a source revealed to him months ago that Bitmain had actually lost closer to $700 million in Q3, with Q4 losses set to be even higher. “And no ‘smoking mirrors’ on 7nm will help it.”

While it's difficult to separate fact from fiction at this point, there’s no denying that Bitmain was hit hard by the bear market. We’ll have to wait for an official response from Bitmain and hope it provides some clarity on the matter.

Read more: Ahead of $18 billion IPO, Bitmain continues to lose money and technical edge

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