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Upcoming Bitmain IPO: The largest in Crypto history

Bitmain IPO

A couple of weeks ago, reports emerged that Bitmain, the Chinese cryptocurrency mining rig manufacturer, was to relaunch its Initial Public Offer (IPO) in the US. This comes after the company dropped its plan to launch an IPO on the Hong Kong stock exchange.

Notably, Bitmain is among very few crypto unicorns in the market currently with the others being cryptocurrency exchanges like Coinbase.

According to the Coindesk report, the Bitmain is filing for an IPO at a staggering $18 billion with a market capitalization of $40–50 billion. Easily making Bitmain’s IPO one of the largest in recorded history, beating Facebook’s IPO of $16 billion. The mining giant is among the most well-funded crypto companies in the world.

Bitmain IPO
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Bitmain has raised a whopping $872 million to date, purely through Venture Funding. Bitmain closed a $422 million venture round in August 2018 with investments from CAS Investment Management; Crimson Ventures; HuangPu River Capital; Jumbo Sheen Group; Newegg; Norís Capital; Temasek Holdings. Just two months prior to its latest funding round, Bitmain raised a whopping $400 million in a Series B funding round led by Sequoia Capital China and GIC.

Notably, Bitmain is among the only major Blockchain and Crypto companies to have not raised funds through a token offering. Block.one, Telegram, LEO and almost all the other major companies have raised some funds through token sales.

Bitmain’s 2019 IPO document

In August 2019, a Chinese news outlet published a report that claimed Bitmain witnessed millions in losses during the first quarter of 2019. The company had an operating income of ~$1 billion over three months. In January and February, Bitmain witnessed staggering losses of $345 million and $280 million respectively but posted a profit of $315 million in March 2019. The huge loss was attributed to the offloading of outdated 16nm mining rig inventory at very low prices. 

Although historically, the company has reported incredible profits. During the period from 2016–2018, the company is reported to have made $3.2 billion in profit, according to investor documents circulated during its Hong Kong IPO stint. 

Also, the company recently launched two new mining rigs namely, Antminer T17e and Antminer S17e, both models were sold out as soon as they were listed. S17e has a hash rate of a whopping 64 terahertz per second and a cool power efficiency of 45 joules per TH. 

BItmain stake in Bitcoin

Two of the largest Bitcoin mining pools BTC.com and Antpool are owned and operated by Bitmain. What’s a mining pool? These are groups of miners that cooperate to use their combined mining power to receive block rewards. 

BTC.com, the largest mining pool, had as much 0.5 million mining rigs that mined ~31% of the total Bitcoin blocks. Antpool, the second-largest mining pool had as much as 0.4 million mining rigs and mines 16.4% of all blocks. Reportedly, Bitmain has made ~2.2 billion of its cryptocurrency holdings from the period 2016-Q1 2018. 

Undoubtedly, Bitmain has a huge influence over the Bitcoin network thanks to its mining pools. Bitmain co-founder, Jihan Wu also maintains Antpool which has the largest hashrate distribution amongst mining pools. Wu came into the limelight in support of Bitcoin Unlimited. Bitcoin unlimited is a scalability solution to Bitcoin network that is pushing the idea to increase the limited storage capacity, as it helps “decongest” the blocks. Replacing the current limit of 1mb with a more flexible system that enables greater freedom. But this decision was met with great resistance as miners feels increasing the storage size could lead to a hard fork in the code and split the network.

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