An american analyst claims to see evidences that Chinese mining giant Bitmain is loosing its edge. And volumnous assets in Bitcoin Cash only aggravate the situation.

Bitmain, the Beijing-based company, co-founded by 32-year-old billionaire Jihan Wu, may need to write down the value of its inventory as makers of rival mining gear catch up, analysts of Sanford C. Bernstein & Co led by Mark Li wrote, Bloomberg reports. According to analysts, though Bitmain's share on the market of mining equipment is still hish, accounting for 85% globally, the company faces raising competition from such rivals as Canaan and Ebang International Holdings, which also plans to attract funding via IPOs in Hong Kong.

“The competitiveness of Bitmain’s chips is in question,” the report reads.

Analysts also recalled the fact that demand for all mining equipment decreased as the prices of cryptocurrencies sharply dropped. Thus, mining equipment manufacturers' suppliers should be more prudent and judicious and ask their customers to make full prepayments.

The report also highlights “major risk” posed by large amounts of Bitcoin Cash owned by Bitmain.

Earlier, Blockstream chief strategist Samson Mow assumed that Bitmain exchanged large amounts of bitcoins, mined by its affilliated pools, to Bitcoin Cash at an average price of $900 per coin. It resulted in huge losses due to Bitcoin Cash price drop.