The leading cryptocurrency mining company Bitmain has officially filed a draft application for listing its shares on the Hong Kong Stock Exchange. The document discloses information to the public needed for its IPO procedure.
74.5 Percent Market Share
Chinese cryptocurrency mining giant Bitmain moves forward with its plans for an Initial Public Offering (IPO), filing a required draft application with the Hong Kong Stock Exchange (HKEX) disclosing important information to the public.
The document mainly outlines the strengths of the company, highlighting that Bitmain is, indeed, the largest global “ASIC-based cryptocurrency mining hardware company in terms of sales revenue in 2017, accounting for a market share of 74.5%.” What is more, the company has described itself as “one of the few companies offering mining solutions for various cryptocurrencies” such as Bitcoin, Bitcoin Cash, Ether, Litecoin, Dash, and Zcash.
It’s worth noting, though, that the world’s second-largest bitcoin mining hardware maker Canaan Inc., filed for an IPO earlier in May.
Troubles in Paradise
The filed document also sheds some clarity on Bitmain’s financial and inventory situation. The draft reveals that the company is, indeed, facing adverse challenges due to “market volatility.”
In Early 2018, we anticipated strong market growth for cryptocurrency mining hardware in 2018 due to the upward trend of cryptocurrencies price in the fourth quarter of 2017, and we placed a large amount of orders with our production partners in response to the anticipated significant sales growth. However, there had been significant market volatility in the market price of cryptocurrencies in the first half of 2018. As a result of such volatility, the expected economic return from cryptocurrency mining had been adversely affected and the sales of our mining hardware slowed down, which in turn caused an increase in our inventories level and a decrease in advances received from our customers…
Earlier in August, two major companies have publicly denied being involved with the prospective IPO of Bitmain, casting yet a fresh round of controversy around it. The companies in question are Tencent and Softbank, both of which denied interest in the IPO.
It’s also important to note that Bitmain’s purported vast reserves of Bitcoin Cash (BCH) are also putting the company at a disadvantage, as they would remain relatively illiquid unless the market undergoes a notable transformation.
Nevertheless, the news for Bitmain’s IPO filing did have a massive impact on BCH’s price, which is up 20 percent in the last 24 hours according to data from CoinMarketCap.
What do you think of Bitmain’s IPO? Don’t hesitate to let us know in the comments below!
Image courtesy of ShutterStock and Quartz
