No Christmas miracle for Bitcoin and wheels coming off this New Year
Many analysts expected a Christmas rebound for Bitcoin.
On December 23rd, Cryptoslate, an industry site, said the cryptocurrency markets were experiencing a strong Christmas rally.
Bitcoin was up 22.6%, going from $3,270 back to $4,000.
The Santa rally didn’t last.
According to the Digital Journal, quoting Sebastian Sinclair writing at CoinDesk, the recent Bitcoin rally above the $4,000 range was beaten back over the holiday putting pressure on the bulls to somehow gain momentum.
“Bitcoin went over $4,200 on Christmas Eve, but by early on Christmas day it was back at $3,720,” Sinclair reports.
“The $3,675 level resistance has held so far but just. Bitcoin may need to test some resistance levels before returning to any recovery rally or it may even reach new lows before the year-end.”
According to the Cointelegraph, In the short-term, Morgan Creek Digital Assets founder Anthony Pompliano expects Bitcoin to break below $3,000.
Someone has to pay the price, but who?
According to TechCrunch, Bitcoin is down 75% to a meager $3,700, sinking as quickly as its meteoric rise, and industry startups are paying the price.
The latest victim is Bitmain, the largest provider of bitcoin mining hardware that very recently submitted its IPO prospectus to the Stock Exchange of Hong Kong, but the city has yet to issue a decision on this, waiting for a better regulatory environment surrounding cryptos.
Bitmain reported more than $2.5 billion in revenue last year, up nearly 10 times on the $278 million it claimed for 2016. As for the first half of 2018, Bitmain said it surpassed $2.8 billion in revenues.
“There has been some adjustment to our staff this year as we continue to build a long-term, sustainable and scalable business,” a spokesperson for Bitmain told CoinDesk.
A Chinese LinkedIn-like platform, Maimai, suggests as many as 50% of the company’s headcount could be laid off, reports TechCrunch.
Bitmain employs at least 2,000 people, up from 250 in 2016, according to PitchBook.
Bitmain has raised more than $800 million in venture capital funding from Sequoia, Coatue Management, SoftBank and more. At a valuation of $12 billion, it quickly soared to become the most valuable crypto startup in the world, surpassing Coinbase, which itself attracted an $8 billion valuation this fall.
According to Business Insider, Bitmain ballooned from 1,000 to 3,100 employees this year with part of that growth involving investment into artificial intelligence and blockchain technologies, which the company has decided to scale back on, according to a source.
More staff sacrificed
Huobi Group, a crypto trading platform also headquartered in Beijing, is laying off a portion of its 1,000 employees, too, according to a report from the South China Morning Post, according to TechCrunch.
“Brooklyn-based ConsenSys earlier this month confirmed it was laying off 13% of its 1,200-person staff. The company, active in the crypto ecosystem, incubates and invests in decentralized applications built on the Ethereum blockchain,” says TechCrunch.
“Steemit, a distributed app designed to reward content creators, laid off 70% of its staff just days earlier, citing poor market conditions.”
According to the CoinTelegraph, quoting a report published in July 2018, over 1,000 ICOs had been declared ‘dead’ while bigger projects began to slim down their operations to ensure they remain cost-effective and profitable.