As the cryptocurrency market continues to navigate through prolonged bearish trends, strategic shifts within major mining hardware manufacturers have become critical for survival. Among the most significant developments in recent months is Bitmain’s large-scale deployment of 100,000 mining rigs ahead of China’s annual hydro season — a move closely tied to co-founder Micree Zhan regaining control over core mining operations.
This ambitious effort, centered in Sichuan’s hydropower-rich regions, marks a pivotal moment in Bitmain’s operational restructuring and cash flow optimization strategy. While officially framed as a standard business collaboration, evidence suggests a deeper repositioning of leadership and resources under Zhan’s guidance.
Preparing for the Hydro Season Surge
Every spring, Bitcoin miners across China migrate to Sichuan and other southwestern provinces to take advantage of low-cost hydroelectric power during the rainy season. With electricity prices dropping below $0.02 per kWh, these months offer a crucial window for maximizing mining profitability.
Recent reports confirm that a new mining facility with 100,000 machine slots has been rapidly deployed in Sichuan — fully expected to go online by May. If operated at full capacity, this setup could generate approximately 1.33 EH/s of hashing power, representing around 3% of Bitcoin’s total network hashrate and matching the current output of Huobi Pool.
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The infrastructure behind this deployment traces back to Hainan Dalu Fangzhou Data Technology Co., Ltd., established in November 2018 with full ownership by Wang Ming, an otherwise unknown figure in the blockchain space. By January 2019, Bitmain’s wholly-owned subsidiary Fujian Chuangke Technology acquired a 40% stake, while Micree Zhan himself joined as an executive. This alignment strongly indicates strategic coordination between Zhan and Bitmain, despite official statements downplaying personal involvement.
According to industry insiders, the facility will run exclusively on Bitmain’s own Antminer models — including the S11, S15, and T15 — all sourced directly from Bitmain inventory. This detail supports broader observations about Bitmain’s evolving business model: leveraging existing hardware stockpiles to maintain operational presence without heavy capital outlay.
The “Joint Mining” Strategy: A Survival Play
Facing financial pressure amid declining crypto prices and stalled IPO prospects, Bitmain introduced a “joint mining” program in late 2018. Under this model, external partners provide land, power infrastructure, and upfront electricity payments, while Bitmain supplies miners — effectively transferring much of the operational cost and risk.
While many traditional mining operators were hesitant — particularly due to Bitmain’s refusal to post performance bonds — non-industry investors saw opportunity. Reports indicate that real estate and energy-sector entrepreneurs have stepped in, viewing the partnership as a way to enter cryptocurrency mining with technical support from a market leader.
Hainan Dalu Fangzhou appears to be one such partner. As a newly formed entity with no prior mining experience, its rapid deployment of a massive facility aligns with the joint mining framework. The fact that Zhan now oversees operations suggests he is personally steering Bitmain’s most viable path to sustained cash flow generation.
“Their old mining operations were poorly managed — high electricity costs, inefficient maintenance, and bloated teams,” said Lu Yuan (pseudonym), a seasoned mining operator. “Now they’ve spun off the mine management side and put Micree in charge. It’s a smarter structure.”
Restructuring for Resilience
Behind the scenes, Bitmain has undergone sweeping internal changes aimed at reducing fixed costs and refocusing on core competencies:
- Massive layoffs: Over 50% workforce reduction reported in late 2018, including complete disbandment of the Bitcoin Cash (BCH) development team.
- Mine closures: Abandonment of large-scale projects, including a halted $500 million investment plan in Texas.
- Business spinoffs: Launch of BitDeer (Bitdeer.com), a cloud mining platform that packages miner access, electricity, and maintenance into subscription services — accelerating cash inflow.
- Leadership transition: Both Micree Zhan and Jihan Wu stepped down as co-CEOs in December 2018, reportedly handing day-to-day operations to Wang Haichao, former product director.
Despite stepping back from executive roles, both founders remain influential shareholders. However, their public appearances have grown sparse. A widely circulated photo from Bitmain’s 2019 annual meeting showed Zhan visibly emotional, wiping away tears as Wu comforted him — a moment interpreted by many as symbolic of the immense pressures facing the company.
Wu has since been linked to a new venture codenamed “Matrix,” led by former investment director Ge Yuesheng. Meanwhile, attempts to rehire dismissed BCH staff have met resistance, reflecting lingering tensions from past decisions.
IPO Crossroads and Market Realities
Bitmain filed for an IPO on the Hong Kong Stock Exchange in September 2018, aiming to raise capital amid tightening liquidity. However, with嘉楠耘智 (Canaan) and 亿邦国际 (Ebang) both failing to complete listings, investor confidence has waned.
With the IPO deadline approaching, transparency remains limited. Yet operational moves speak volumes: rather than retreat entirely from mining, Bitmain is adapting — shifting toward asset-light models like joint mining and cloud hashing.
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As one pre-IPO investor confided: “Nobody believes in the IPO anymore. Going public in a bear market feels like selling assets at fire-sale prices.”
Strategic Outlook: Lighter Footprint, Sharper Focus
Bitmain’s current trajectory reflects a calculated pivot:
- Core focus: Accelerating development of next-gen chips like the BM1397 and upcoming S17 series.
- Cash flow emphasis: Prioritizing short-term revenue via cloud mining (BitDeer), joint ventures, and inventory monetization.
- Operational efficiency: Outsourcing power procurement and mine management to specialized partners in low-cost regions.
- Leadership clarity: Ending the controversial dual-CEO model to enable faster decision-making.
As Jiang Zhuolao, CEO of LitecoinPool, observed:
“Two heads on one horse rarely work well. If I were them or their investors, I’d split responsibilities — let each lead what they’re best at, then cooperate strategically.”
Frequently Asked Questions
Q: Is Micree Zhan officially back in charge at Bitmain?
A: While no longer serving as CEO, Zhan remains a key shareholder and has taken direct oversight of critical mining initiatives like the Sichuan deployment, signaling renewed influence.
Q: What is “joint mining” and why is it important?
A: Joint mining allows Bitmain to deploy miners without bearing electricity or infrastructure costs. Partners supply power and facilities; Bitmain provides hardware — a capital-efficient model for bear markets.
Q: How does the Sichuan mine reduce costs?
A: During the hydro season (May–October), electricity in Sichuan can cost less than $0.02/kWh — significantly boosting mining margins compared to grid-powered facilities elsewhere.
Q: Will Bitmain go public in 2025?
A: As of now, there is no confirmed timeline. Previous IPO attempts stalled amid market downturns and corporate restructuring. Any future listing would depend on market recovery and financial stabilization.
Q: Are Antminers still competitive in 2025?
A: Yes. With continuous R&D into energy-efficient chips like BM1397 and planned releases such as the S17 series, Bitmain maintains technological leadership in ASIC mining hardware.
Q: What happened to Bitmain’s AI division?
A: The company has de-emphasized non-core ventures like AI chips to focus on blockchain infrastructure and mining solutions amid financial constraints.
Bitmain’s journey through the bear market exemplifies resilience through adaptation. By embracing leaner models, optimizing energy use, and reassigning leadership roles, the company aims not just to survive — but to emerge stronger when market conditions improve.
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