Bitmain Announces Closing of Israeli R&D Facility
Bitmain is closing its research and development facility in Israel within the week. It is the latest blockchain firm to pare back operations as crypto markets have crashed in the second half of 2018.
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Research and Development Center Closing
First reported by Israeli business newspaper Globes on December 10th, the Chinese crypto mining manufacturer will be shutting down its Ra’anana research and development (R&D) center. 23 employees will be laid off from the facility, which opened in 2016 and is Bitmain’s only facility in Israel.
The site was not used to mine cryptocurrencies; instead it focused on the development of blockchain and artificial intelligence technology.
Gadi Glikberg, a Vice President at Bitmain who oversaw the facility, will also leave the company. In explaining the closure, Glikberg reportedly told employees that:
“The crypto market has undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation.”
The Ra’anana facility was one of three R&D centers that Bitmain operates, with the other two located in Amsterdam and Hong Kong. The Israeli site also led the development of ConnectBTC, which is Bitmain’s third mining pool after BTC.com and Antpool.
ConnectBTC hasn’t mined a BTC block since the beginning of October, and it’s unclear whether it will also close down.
Bitmain Still Expanding, Planning IPO
Bitmain’s exit of the Israeli market marks a reversal from July of this year, when the company told Globes that it was planning to increase the size of its team in Ra’anana to 45.
But it appears the dropping cryptocurrency markets, and the fallout from the chaotic split of Bitcoin Cash (BCH) into rival versions, is beginning to have real-world effects on Bitmain’s business.
Bitmain applied for an initial public offering (IPO) on the Hong Kong Stock Exchange in September. But there has been no public statements from the company on the timing of its entrance on public markets. A report from mid-November said that the company was restructuring in order to prepare itself for a listing.
Crypto markets have tumbled since the start of November, with the price of bitcoin (BTC) dropping by 45 percent.
BCH, the big block fork of bitcoin that is supported by Bitmain CEO Jihan Wu, has fared even worse, plummeting by 75 percent in the same time span. Despite Bitmain’s preferred BCH development team Bitcoin ABC winning the so-called hash war, it is a victory that could be pyrrhic.
While the R&D side is taking a hit, Bitmain’s expansion of its mining operations has continued apace.
On November 16th, the firm opened a new bitcoin mining facility in the United States. The firm currently has 4 mining farms in the United States and told Bitsonline it has plans to open up another 13, with the next scheduled for January.
Crypto Industry Under Pressure
It’s not only Bitmain that is under financial pressure, however.
On December 6th, Ethereum development company ConsenSys announced it would be laying off 13 percent of its workforce. The price of ether (ETH) has also cratered in the last month, falling by 53 percent since November 1st.
There are other casualties of the crypto bear market. Decentralized social media site Steemit also told the public on November 28th that it was laying off 70 percent of its staff. And adult entertainment site SpankChain has also reduced its staff by at least 30 percent over the course of 2018.
The dropping markets have also led crypto organizations to shut down or sell off parts of their business. ETCDEV, an Ethereum Classic (ETC) development team, said in a tweet on December 3rd that it would be closing down completely. And Canadian firm Squire Mining Ltd. said on November 30th that it was in negotiations to acquire CoinGeek.com, which supported the Bitcoin SV implementation of Bitcoin Cash.
What do you think about Bitmain closing its Israeli R&D center?
Images via Pixabay, BTC.com, Ian Edwards