Bitmain Denies Layoff Rumors, but Hong Kong IPO Hopes Fade

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In a day filled with conflicting narratives, Bitmain—once the dominant force in cryptocurrency mining hardware—found itself at the center of two major developments: denying widespread layoffs and unveiling its latest 7nm mining chip. While the company attempts to project stability and innovation, mounting challenges suggest its path to a Hong Kong listing remains uncertain.

Layoff Speculation Meets Firm Denial

On February 19, reports surfaced claiming that Bitmain had carried out a significant round of staff reductions across multiple departments, including blockchain, artificial intelligence (AI), and semiconductor development. Notably, the AI division—once viewed as a strategic growth engine—was reportedly hit hardest.

This marked the second time in recent months that Bitmain faced such speculation, following similar rumors in late 2018. In response, the company issued a clear statement to 36氪 (36Kr):

“The external rumors are untrue. At the end of 2018, Bitmain made regular personnel adjustments based on business needs. There have been no new organizational changes recently, and we remain open to welcoming talent from all sectors.”

Despite this reassurance, the timing raises questions. Earlier in January, Bitmain confirmed the closure of its Amsterdam office and remained silent on executive leadership changes involving co-founders Wu Jihan and Zhan Ketuan stepping down as CEOs—a move it declined to comment on. It also denied claims of selling off inventory at steep discounts, although market data tells a different story.

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Technological Progress Amid Market Downturn

On the same day as the layoff rumors, Bitmain launched BM1397, its second-generation 7nm mining chip. According to official specifications, the BM1397 achieves an energy efficiency of just 30J/T—approximately 28.6% more efficient than its predecessor. Designed for SHA256-based cryptocurrencies like Bitcoin (BTC) and Bitcoin Cash (BCH), the chip powers the next-generation Antminer S17 and T17 series.

This release underscores Bitmain’s continued focus on maintaining technological leadership in ASIC-based mining hardware. Back in September 2018, the company introduced its first 7nm miner, positioning itself ahead of competitors such as Canaan Creative and Ebang International.

However, innovation alone isn’t enough to counter broader industry headwinds.

Revenue Reliance on Mining: A Double-Edged Sword

According to Bitmain’s 2018 IPO prospectus, mining hardware sales accounted for 94.3% of total revenue—$2.68 billion over a six-month period ending June 30, 2018. Frost & Sullivan research confirms that by 2017 revenue metrics, Bitmain was the world’s largest ASIC-based crypto mining equipment manufacturer, commanding 74.5% of the global market share.

Even today, Bitmain claims to hold around 70% market share in mining hardware. A spokesperson emphasized:

“We will continue to focus on our core blockchain and AI initiatives, strengthening our competitive edge through continuous technological iteration.”

Yet reliance on mining revenues has proven risky. With Bitcoin’s price dropping over 70% in 2018, demand for high-cost mining rigs plummeted. By January 2019, first-generation 7nm Antminers were being sold at discounts reaching 57%, indicating weak downstream demand and potential overproduction.

Strategic Pivot to AI—and Its Challenges

Recognizing the volatility of crypto markets, Bitmain announced plans in mid-2018 to diversify into AI chip development. The goal was to leverage its expertise in low-power, high-efficiency semiconductor design for applications beyond mining—from edge computing to smart surveillance.

But progress has been slow. Unlike established players like NVIDIA or Huawei’s Ascend series, Bitmain lacks a robust software ecosystem and enterprise partnerships critical for AI adoption. Moreover, investor skepticism grew as financial disclosures revealed that AI contributed negligible revenue compared to mining.

The pivot also coincided with internal leadership tensions and shifting priorities—factors that may have diluted execution.

Hong Kong IPO Dreams Dashed?

Bitmain filed its initial listing application with the Hong Kong Stock Exchange (HKEX) in September 2018. However, hopes have dimmed significantly.

Charles Li, CEO of HKEX, stated during the World Economic Forum in Davos that none of the three major mining firms—Bitmain, Canaan Creative, or Ebang International—met the exchange’s "suitability for listing" criteria. These include sustainable profitability, diversified business models, and reduced exposure to speculative digital assets.

As of now:

Regulatory caution is understandable. Crypto-related businesses face scrutiny due to market volatility, unclear regulatory frameworks, and concerns about long-term viability.

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Frequently Asked Questions (FAQ)

Q: Is Bitmain still profitable?
A: While exact figures post-2018 are limited, declining crypto prices and discounted hardware sales suggest shrinking margins. Profitability likely depends on cost control and inventory management rather than strong demand.

Q: Did Bitmain really lay off employees?
A: The company officially denies recent layoffs. However, organizational restructuring in late 2018 and office closures indicate workforce optimization efforts, even if not labeled as mass layoffs.

Q: Can Bitmain succeed in AI?
A: Technically possible—but challenging. Without strong industry alliances, software support, or proven use cases, breaking into the competitive AI chip market will require substantial investment and time.

Q: Why can’t mining companies list in Hong Kong?
A: HKEX requires businesses to demonstrate sustainable earnings and business models not overly reliant on speculative assets like cryptocurrencies. Mining firms’ revenue volatility makes them poor fits under current guidelines.

Q: What is BM1397 used for?
A: The BM1397 is an application-specific integrated circuit (ASIC) chip optimized for SHA256-based cryptocurrencies such as Bitcoin and Bitcoin Cash. It powers newer Antminer models like the S17 and T17.

Q: Does Bitmain still lead in mining hardware?
A: Yes, by market share estimates. Despite competition from MicroBT and others, Bitmain maintains technological advantages and brand recognition among miners globally.

The Road Ahead: Adaptation or Decline?

Bitmain stands at a crossroads. Its legacy in mining is undeniable—but sustainability requires evolution. The company must balance near-term survival in a bear-market environment with long-term bets on AI and decentralized infrastructure.

Yet without access to public capital markets and amid growing global regulatory caution, funding innovation becomes harder. Private financing may fill the gap temporarily, but scale demands transparency and trust—qualities that recent rumors and leadership ambiguity have strained.

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Core Keywords:

As the blockchain ecosystem matures, companies like Bitmain must prove they’re more than hardware vendors riding a speculative wave—they need to become foundational players in a decentralized digital economy. Whether they can make that transition remains one of crypto’s most compelling unanswered questions.