The once high-flying cryptocurrency mining hardware giant Bitmain is reportedly facing severe cash flow challenges, sparking concerns about its financial stability and the broader health of the mining industry.
Recent reports from multiple employees on the professional networking platform Maimai indicate that Bitmain has withheld performance bonuses for September and slashed base salaries by 50% across the board. Employees claim they have no clear timeline for when the withheld wages will be paid, fueling anxiety within the organization.
This internal unrest was seemingly confirmed by an internal memo from Bitmain’s Executive Management Team (EMT), titled Notice on the Deferral of Partial Salary Payments for September. The document stated: “As of September, the company’s operating cash flow has not turned positive, and deployment progress of mining machines to mining farms remains significantly below target. As a result, the EMT has decided to delay partial salary payments for all employees, with disbursement to be reviewed after the October 7 holiday.” The memo emphasized that all managers and staff must remain committed to fulfilling their responsibilities.
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Bitmain’s Rise and Challenges
Bitmain has long been a dominant force in the Bitcoin mining ecosystem, best known for manufacturing ASIC miners under its Antminer brand. At its peak, the company was synonymous with profitability and innovation in blockchain infrastructure.
According to public disclosures from its 2018 Hong Kong IPO filing—though the listing never materialized—Bitmain sold 2.56 million mining units in the first half of that year alone. Mining hardware sales accounted for nearly 95% of total revenue, with net profits reaching $743 million, an almost eightfold increase year-over-year. At the time, the company was valued between $12 billion and $15 billion.
However, several setbacks followed. Its initial public offering (IPO) attempt stalled due to regulatory scrutiny and market volatility. More damaging was the prolonged leadership battle between co-founders Wu Jihan and Zhan Ketuan, which culminated in a corporate split.
Under the resolution, Bitmain underwent a strategic division: cloud mining arm Bitdeer and overseas mining operations in the U.S. and Norway were spun off, with Wu Jihan taking leadership of Bitdeer. Meanwhile, the Antpool mining pool was separated into an independent entity led by Zhan Ketuan. Notably, Bitdeer completed a SPAC merger and began trading on the Nasdaq in April 2025, while Bitmain’s own public listing remains indefinitely delayed.
Mining Industry Under Pressure
The salary deferral issue points to deeper structural challenges within Bitmain—and the wider mining sector. The EMT memo specifically cited "slow deployment of mining machines" as a key factor, implying weaker-than-expected sales or delayed customer adoption.
This trend isn’t unique to Bitmain. Other publicly traded Chinese mining hardware companies like Canaan Creative (NASDAQ: CAN) and Ebang International (NASDAQ: EBON) are also struggling amid prolonged bearish conditions in the cryptocurrency market.
Ebang reported product sales of just $1.15 million in the first half of 2023, a staggering 95.24% drop compared to $25.06 million during the same period the previous year. Canaan’s second-quarter 2023 results showed mining revenue of $57.9 million—down 32.2% quarter-on-quarter and 75.63% year-on-year from $238 million.
These numbers reflect a broader industry downturn driven by multiple converging factors.
Key Factors Impacting Bitcoin Mining Economics
Market Volatility and Price Decline
As highlighted by Zhang Xiaobing, Executive President at Kefangde Investment and a智库 expert at Whale Platform, “The downturn in Bitcoin mining is primarily due to falling BTC prices and rising mining difficulty.”
Bitcoin’s price peaked in 2021 near $69,000 before entering a prolonged correction phase. With BTC trading significantly lower through 2023 and much of 2024, miners’ revenue per block has declined sharply, squeezing profit margins.
Rising Operational Costs
Mining difficulty—a measure of how hard it is to validate blocks—has continued to climb as more efficient hardware enters the network. This means older or less efficient machines generate fewer rewards, forcing miners to upgrade equipment or shut down operations.
Higher electricity costs and supply chain constraints have further increased capital expenditures, making it harder for even large players like Bitmain to maintain healthy cash flows if hardware sales slow.
Intensifying Competition and Market Consolidation
The mining industry is increasingly dominated by a few large players who benefit from economies of scale. Smaller operators are being squeezed out, leading to consolidation. For hardware manufacturers, this means fewer customers with greater bargaining power—potentially pressuring pricing and margins.
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Regulatory Headwinds
Regulatory scrutiny around cryptocurrencies has intensified globally. Countries including China (which banned crypto mining in 2021), Iran, and certain U.S. states have imposed restrictions or outright bans on mining activities.
Even in more crypto-friendly jurisdictions, environmental concerns over energy consumption have led to increased oversight. These developments dampen long-term growth expectations for both miners and hardware providers.
Zhao Wei, Senior Researcher at OKX Insights, explained: “The development of Bitcoin-related industries is shaped by market cycles, increasing difficulty, fierce competition, and growing regulatory pressure. All these forces are currently aligned in a way that challenges short-term profitability.”
He added: “Bitcoin’s price performance remains closely tied to miner sentiment. With reduced income and higher costs, many miners are operating at a loss—this naturally reduces demand for new equipment.”
FAQ: Understanding Bitmain’s Current Situation
Q: Is Bitmain going out of business?
A: There is no evidence that Bitmain is shutting down. However, the company appears to be undergoing financial stress due to weak market conditions and internal challenges. Salary deferrals suggest liquidity issues but not insolvency.
Q: Why are miners buying fewer machines now?
A: Lower Bitcoin prices mean reduced mining rewards. Combined with rising electricity and hardware costs, many miners aren’t profitable unless they use highly efficient equipment or low-cost power sources.
Q: How does Bitmain’s situation affect the overall crypto market?
A: As a major supplier of mining hardware, Bitmain’s struggles signal broader weakness in mining demand—often seen as a leading indicator of market sentiment ahead of halving events or price recoveries.
Q: What role does regulation play in Bitmain’s challenges?
A: While Bitmain doesn’t operate mines directly, global crackdowns on crypto mining reduce end-user demand for its products. Regulatory uncertainty also discourages investment in new mining infrastructure.
Q: Could Bitmain recover if Bitcoin prices rise?
A: Yes. A sustained rally in BTC price would likely boost miner revenues, increase demand for new ASICs, and improve Bitmain’s sales and cash flow outlook significantly.
Q: Are employee salary cuts common in tech startups during downturns?
A: While not standard practice, some private companies implement temporary pay adjustments during cash crunches—especially when external funding is limited and markets are unfavorable.
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Final Outlook
While Bitmain remains a key player in the blockchain infrastructure space, its current cash flow issues underscore the cyclical nature of the cryptocurrency mining industry. Once valued at tens of billions during the bull run, the company now faces headwinds from declining demand, fierce competition, and macroeconomic pressures.
Its ability to navigate this downturn will depend on its financial resilience, product innovation, and the eventual recovery of Bitcoin’s price cycle. For now, all eyes are on whether Bitmain can stabilize operations—and whether the broader mining ecosystem is nearing a bottom ahead of future network upgrades.
The story of Bitmain is far from over—but it serves as a powerful reminder that even giants can stumble when market tides turn.