Crypto Mining Firm Bitmain Plans to Go Public in the US
Crypto Mining Firm Bitmain Plans to Go Public in the US
Despite its management troubles, crypto mining hardware maker Bitmain Technologies filed for an initial public offering (IPO) with the United States Securities and Exchange Commission this week. According to reports from Bloomberg, the IPO could raise $300-500 million in the US.
But the company’s long road to an IPO has been a rough one. In the past two years, Chinese authorities have imposed major fines on the firm, and its stock has plunged.
China’s regulatory approach to cryptocurrencies has made it difficult for mining firms to make a profit. As prices have plummeted, the companies have diversified into non-mining services. But, if the crypto industry continues to grow, mining equipment will be in high demand.
It’s still not clear whether or not the IPO will go through, but it’s possible that the company’s new CEO will be an outsider. It’s not clear when the new chief will be named, but it’s likely that it will come soon.
The IPO will be a big deal for the cryptocurrency industry, but it’s also an important milestone in allowing companies to publicly trade on US stock exchanges. Moreover, it could pave the way for more compliant mining firms to enter the market.
Earlier this year, the IPO was expected to bring in around $300-500 million in the US. But as the price of Bitcoin dipped below $3200 last year, the company had to rethink its strategy.
Now, a new report from TechCrunch suggests that Bitmain has hired a new CEO. It also cites an unnamed source that says the company has resubmitted its application in secret.
With a new CEO and a resubmitted application, Bitmain is preparing to launch a US IPO. It will likely list its shares in November.
A source told CoinDesk that the IPO could be as high as $500 million. This is a record for an IPO in the United States, and it could help to attract more institutional investors into the space.
The company’s IPO filing is just the latest in a series of moves by Chinese miners that are looking to become publicly traded. Canaan Creative, which is listed in Hong Kong, is also reportedly considering an IPO in the US.
But Canaan and other Chinese crypto miners are facing serious financial challenges, mainly as a result of the recent black swan event that dampened global mining demand. In addition to the financial losses, the companies also have to face the question of whether or not they can continue making money in the future.
That’s a challenge, but also an opportunity, because the companies can now focus their efforts on developing new chip technology that will improve their competitive position in the market. The Chinese government is eager to bulk up its technological prowess, so it’s no surprise that mining chip companies are looking to bolster their presence in this space.
As the mining industry struggles to find a balance between attracting new investors and staying profitable, it’s likely that we will see more of these IPOs in the coming years. As with any new venture, there are some key risks that need to be carefully considered. Operating risks include issues with internet connectivity, potential problems with ASICs overheating, and hacking. Power concerns are especially important, because mining is dependent on a constant supply of electricity.