Bitmain chief plots cryptocurrency comeback after ousting of co-founder
- The company’s billionaire chief executive, Wu Jihan, is touting new sales initiatives to attract clients
- Bitmain is grappling with increased competition from smaller rivals Canaan and MicroBT
Bitmain Technologies’ billionaire chief executive, Wu Jihan, is back in the driver’s seat after the ousting of his co-founder, touting new sales initiatives to attract clients as the company fends off rivals.
Wu hosted a client meeting on Saturday, according to attendees who asked not to be identified because the event was private. It was his first public appearance since a power struggle six weeks ago, when he announced as founder and chairman that his co-founder Micree Zhan Ketuan was no longer with the Beijing-based company.
That also marked Wu’s re-emergence as the company’s chief executive, following his loss of control to Zhan, who had held de facto leadership at Bitmain from March until his resignation.
Wu and other Bitmain executives announced at the event new sales initiatives to lure customers, including a promise to seek deposits as low as 20 per cent for those who buy its bitcoin mining rigs in large bulk, the attendees said. Usually, such deposits are 50 per cent or full payment in advance is required. The latest models from Bitmain cost between US$1,000 to $2,000.
“The Bitmain you are familiar with is back,” read a presentation slide from the gathering, which took place in Chengdu, capital of southwestern China’s Sichuan province and a hub for local cryptocurrency miners.
Nishant Sharma, a Bitmain spokesman, declined to comment.
Bitmain revived plans for a US listing earlier this year after its failed attempt in less cryptocurrency-friendly Hong Kong in 2018. The company, which was valued at about US$15 billion in a private funding round last year, is grappling with intensifying competition from smaller rivals Canaan and MicroBT.
Canaan had a 22 per cent market share of bitcoin mining machines in terms of computing power sold in the first half of this year, up from 15 per cent in the same period last year, according to Frost & Sullivan figures cited in Canaan’s initial public offering prospectus.
Inside the rise and fall (and rise?) of cryptocurrency mining giant Bitmain
While Bitmain and its major rivals produce machines with similar specifications and prices, they live and die competing against each other – and smartphone makers – for tight chip supplies from foundries operated by Taiwan Semiconductor Manufacturing Co and Samsung Electronics.
Bitmain’s two co-founders had long served as co-chief executives, but they had been replaced this March by Zhan’s pick, Wang Haichao, as the company was grappling with lay-offs and a cash crunch triggered by bitcoin’s price plunge. Wang is still employed by the company.
In October, Wu announced Zhan’s resignation in a memo, warning employees against taking further instructions from Zhan or attending any meetings he convened. The two had started the mining gear company together six years ago.
Saturday’s event reaffirms Wu’s control of the company. Fan Xiaojun, a long-time Bitmain sales chief who had been demoted by Zhan, showed up at the meeting and had regained his position, said the attendees. Bitmain also promoted Wu’s new cryptocurrency financial start-up Matrixport at the event, they said.
Right after Wu’s note about Zhan’s departure, the Bitmain chief executive also announced his pick for the company’s head of human resources to replace Zhan’s appointee, according to a memo viewed by Bloomberg News.
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