Bitmain US IPO plans possible failure

2018 was a cold year for cryptocurrencies, with Bitmain failing to go public and cryptocurrencies losing their value.

Bitmain Technologies Ltd. is a Bitcoin mining giant that failed to launch its Initial Public Offering (IPO) in Hong Kong back in 2018 and could not raise the $3 billion that they planned to. Their application lapsed in 2019 and hasn’t been renewed until recently there has been news that they are filling to go public in the US and according to Bloomberg they are planning to raise $300 – $500 million.

Bitmain has been valued at $15 billion and has reduced the fundraising target due to the volatility of the cryptocurrency.

Bitmain just went through a management change right after their news of US IPO listing with their co-founder and executive director, Micree Ketuan Zhan being ousted by another co-founder on October 29.

Only one Hong Kong-based cryptocurrency Diginex has passed all the hurdles of the Hong Kong Securities and Features Committee (SFC) board in November 2018 and been formalized in October. But, according to some sources, they haven’t submitted all the required documents.

Bitmain recently filed its IPO with the United States Securities and Exchange Commission (SEC). Bitcoin also had a value of $3200 back in December 2018 and recently it’s valued at $9,300 per Bitcoin. Bitcoin has a sound future with cryptocurrencies becoming more popular.

Bitmain is trying to beat its rival company Canaan by filing US filing. Canaan was their competitor from the east and now they’re fighting in the same territory. Canaan beat Bitmain to the US filing.

According to Tencent, the Deutsche Bank is sponsoring Bitmain listing. The SEC does a thorough check and review before approving the listing. Generally, the SEC conducts three rounds of inquiries that lasts for around one to two months.

Bitmain has a 75% market share of the crypto hardware and this was one of the reasons why many investors were getting attracted. After the exit of the co-founder, they hired a former representative of Nasdaq, China Zheng Hua, as a consultant.

All three companies Bitmain, Canaan, and Yibang have not been successful in launching themselves in Hong Kong. Bitmain has been talking about its US filing since June 2019.

Even with the rapid advancements of technology, Bitmain has been able to stay out on top. Listing with the SEC will be strict and they will review their listing thoroughly. Bitmain seemed to be immortal until its failure of the 2018 Hong Kong listing. Yet they are trying to come out on top and their dominance in the crypto hardware market helps them gain the investors they need.

The failure in Hong Kong was related to the drop in Bitcoin’s value by 85%. It could also have been due to a lack of a crypto regulatory framework and little or no knowledge of the crypto world.

Canaan’s filing with the SEC plans to raise $400 million.

However, even after all that Bitmain has been through, it’s still considered an unstable company which hasn’t been able to withstand tough times, especially with their co-founder exiting.

Image by Daniel Reche from Pixabay