Cryptocurrency mining giant Bitmain Technologies, Ltd. has been preparing for an IPO in recent weeks.
According to Coindesk, Bitmain could be seeking to raise as much as $18 billion in a public offering, which would value the company between $40 billion and $50 billion. This comes after Bitmain reported $1.1 billion in profit in 2017, as well as another $1.1 billion in profit in Q1 2018 alone.
However, as the price of Bitcoin has fallen from $20,000 last December to a low of $5,800 in August, some potential investors in Bitmain have gotten cold feet.
As of 4:45 pm Eastern on Aug. 29, Bitcoin was trading at $7,035, according to CoinMarketCap.com.
Although it was originally reported that companies like Tencent Holdings, Ltd. and Softbank Group participated in Bitmain’s $1B pre-IPO fundraising round in July, both companies have since walked back on those claims.
Bitmain has generated significant controversy due to their overwhelming share of the Bitcoin mining market and significant support for Bitcoin Cash, a controversial offshoot of Bitcoin.
Wave of Cryptocurrency IPOs
Bitmain seems to be the leader of a wave of cryptocurrency IPOs, with Bloomberg reporting that other cryptocurrency mining hardware companies Canaan Inc. and Ebang International Holdings Inc. are also planning to go public, with another mining company, Bitfury, considering going public.
Related: Bitwise, Morgan Creek Partner on New Crypto Fund
Referencing the significant YTD price declines of most cryptocurrencies, Bloomberg explains “the risk is that a lengthy bear market will erode demand for the companies’ specialized computer chips, which miners use to verify virtual currency transactions in a race for crypto-denominated rewards. Bitmain, Canaan and Ebang are trying to adapt their technology for use in other fields such as artificial intelligence, but they’ve yet to prove that the new applications are scalable. Publicly traded shares would offer a real-time gauge of how investors view their prospects.”
Despite the wave of impending IPOs, there are plenty of cryptocurrency companies with no plans of going public. Cryptocurrency exchange Coinbase, which could be worth as much as $8 billion, has been resisting calls to go public for several years.
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