Chinese mining giant Bitmain has put a pin in its Rockdale, Texas mining operations, according to reports from local news media outlet Texas Public Radio on January 10. It’s unclear when (and if) the operations will be resumed.
The decision to temporarily halt mining at Bitmain’s Texas facility apparently comes as a result of the massive decline in the cryptocurrency markets as a whole, declines that have greatly reduced mining profitability of Bitcoin and other cryptocurrencies.
Bitmain Spent “Millions” on the Operation
Milam county judge Steve Young and Texas Public Radio reporters said that the facility, which once employed 15 individuals, had only five employees when the suspension of operations began. Young added that Bitmain had poured millions of dollars into renovating the buildings where the mining operation was based and that there are an estimated 7,000-8,000 mining units within the facility.
“I’m really disappointed because we had advertised this, we had waited for this, we had wanted this and we had welcomed this,” Milam said on January 11. “This was huge, we need some positive news here and we need some jobs here — We need a tax base here and this was a step in the right direction.”
Indeed, Finance Magnates reported in August that residents of the small town were hoping that the opening of the facility would pump some much-needed life into its economy. “It’s not the mining Milam County is used to,” reported local news source KXAN at the time that the mining center was rumored to be opening. “…[But] it’s redefining itself for a modern economy.”
Grim Prospects for the Crypto Mining Industry
This isn’t the first piece of news relating to Bitmain reducing its operations. In the last week fo 2018, reports emerged that Bitmain had begun the first in what is rumored to be a series of rounds of layoffs that will eventually eliminate 50 percent of the company’s employees.
Stocks to Watch This Week – Expedia Group, IncGo to article >>
there’s post on Chinese Linkedin (usually very high accuracy, posted by employees themselves) saying Bitmain will start a layoff the coming week … ???
A separate rumor said the plan is for more than 50% of its headcount ???! pic.twitter.com/b0ZSBuPX4d
— Dovey Wan ? (@DoveyWan) December 23, 2018
Indeed, cryptocurrency mining companies across the globe have taken steps to reduce their operations in the wake of the relentless bear market that has plagued most cryptocurrencies for months. In December, Japanese IT firm GMO announced that it would be ending its mining-related initiatives, although it later said that its mining operations would continue while its hardware manufacturing business would end. Additionally, DMM.com said early this month that it would be shutting down its mining business.
Bloomberg also recently reported that Chinese mining equipment manufacturer Canaan Inc. is exploring holding an IPO in the United States.