To be or not to be – that is the question. In the case of the Bitmain initial public offering (IPO), it’s looking every day that it isn’t to be. A new revelation uncovered by a Twitter user that follows the company almost religiously has shown that the once mighty cryptocurrency mining equipment manufacturer is teetering more toward crashing into the ground in a thunderous explosion.
BTCKING555 tweeted a few days ago that Bitmain’s losses in the third quarter of the year could have been as much as $740 million. If accurate, it would mark the worst quarter in the company’s history, but continues a slide that Bitmain has been experiencing since before the beginning of March.
The tweet reads, “We got leak of Bitmain Q3 numbers! COMPLETE DISASTER. The company lost $740 Million including losses on inventory and bitcoin cash! And this is not accounting for hash war costs!”
BTCKING555 alludes to possible additional losses that could top $1 billion due to Bitmain having a large investment in Bitcoin BCH. Since the digital currency’s value has been cut by more than half its recent value, Bitmain is out a substantial amount of cash.
Bitmain would have no one to blame but itself if it were to fizzle. In preparation of an IPO that was expected to launch this past September, the company falsely claimed to have received backing by a number of international companies. It also ran up substantial debt with a chip supplier – to the tune of $1 billion. It finally paid just over two-thirds of the debt, but there hasn’t been word on whether it has made good on the outstanding portion.
The company has been accused of using customer equipment for its own mining purposes. It faces a class-action lawsuit in California over the allegations, only adding to the uncertain future of its operations.
The company also presented an IPO prospectus with the Hong Kong Stock Exchange that had blatant errors. The ability of Bitmain to completely disregard regulations and present data that has been verified as false should be enough to make any investor skeptical about giving the company any money. Add this to its mounting financial issues are cringe-worthy and should not only make investors say “No, thanks,” but should make them run away screaming.
The post Bitmain IPO reportedly in “death spiral” as losses increase appeared first on CoinGeek.
Silvergate Capital Corporation, the parent company of SilverGate Bank, has revealed its connections with the cryptocurrency industry. The information was disclosed as part of the California-based company’s initial public offering (IPO) filing with the U.S. Securities and Exchange Commission (SEC) as mandated under the law.
Growing number of crypto clients
Owing to the numerous number of startups looking to bank with Silvergate, the bank touts itself as ‘The Banking Platform for Innovators’ in its prospectus, filed with the SEC on Nov. 16. In its filing, Silvergate Capital Corporation disclosed that the bank now provides banking services to 483 cryptocurrency ventures, with a combined $1.7 billion in non-interest-bearing deposits, according to the bank’s financial Q3 2018 report. The number represents an increase of 323% from the 114 companies reported in Sept. 2017.
The bank provides services for a wide array of cryptocurrency services to ventures engaged in the industry. Its primary customers are crypto exchanges, with $793 million in deposits. It also serves institutional investors like hedge funds and VC funds, with the focal point being the crypto assets they manage. This category of institutional investors has brought on board business valued at $573 million in deposits alone. Other crypto firms benefitting from Silvergate’s banking services are new protocol developers and cryptocurrency mining firms. This last category of startups have $227 million in deposits with the bank.
Explaining the numerous funding streaming in from cryptocurrency firms, Silvergate Corporation said, “The majority of our funding comes from noninterest bearing deposits associated with clients in the digital currency industry.” The statement termed it as a “unique source of funding,” which offered an advantage over traditional financial institutions. Those deposits are invested into interest-earning deposits at other banks and investment securities, as well as into lending opportunities “that provide attractive risk-adjusted returns,” it says.
Silvergate Exchange Network (SEN) and its IPO
Capitalizing on its relationship with the crypto sector, Silvergate Corporation launched its own network of digital currency exchanges and investors. It developed its own crypto infrastructure in 2017, called the Silvergate Exchange Network (SEN). SEN aims to allow the efficient movement of U.S. dollars between participating digital currency exchanges and investors around the clock. SEN will file for an IPO in which it will be seeking to raise $50 million and a listing on the New York Stock Exchange.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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An Israel-based cryptocurrency mining Company, Bitfarms, is going public. According to a report by the Calcalistech Israeli financial news outlet from earlier this week, Bitfarms has filed a preliminary prospectus with Canada’s Ontario Securities Commission (OSC) in hopes of being able to eventually launch an initial public offering (IPO) in the country.
Bitfarms was previously known as Blockchain Mining and was listed on the Tel Aviv Stock Exchange five days ago. That move came after the company had seen a steady run-up of shares that spanned 13 months and which saw the company’s stock price climb around 6,500%.
According to the company’s CEO, Wes Fulford, Canada has “one of the most active public markets” in the blockchain industry. He added that the company ultimately decided on Canada after determining that it had one of the most “crypto-friendly” legislations in the world.
The mining company has a strong preference for IPOs over initial coin offerings (ICO). It announced this past January that it would introduce American Depository Receipts on NASDAQ and that it was also considering a listing on the Toronto Stock Exchange by June. It subsequently backed off the plans slightly, instead beginning to offer ordinary shares on OTCQX, the top level of the ADR program, in July.
The firm was previously nothing more than a shelf company called Natural Resources Holdings. In October of last year, its owners cleared off the dust and launched the mining farm through a merger deal with Canada’s Backbone Hosting Solutions. That merger produced a stock boost and renewed interest in the company.
Known then as Blockchain Mining, the company’s luck continued to increase. At almost the same time, the Israeli Securities Authority began a crackdown on cryptocurrency firms in order to prevent them from being listed on stock markets. However, the firm survived the move and continued to be traded publicly with a lot less competition.
Bitfarm maintains four mining farms in Quebec. It concentrates its efforts on Bitcoin Core (BTC), Bitcoin BCH, Litecoin (LTC), Ether (ETH) and DASH. When it released its first public financial statement this past August, it reported net revenue of $22.3 million for the first six month of the year. Of that amount, $4.9 million was net profit. The company asserted that it had mined 1,923 BTC, 2,222 BCH, 3,324 LTC, 567 ETH and 220 DASH.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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在考虑任何具体的首次公开上市时，退一步思考并提出最基本的问题将大有裨益。公司究竟为什么要上市？最初为什么会出现资本市场？出售一家公司的股票有什么意义？当然，答案就是为了筹措资金并最终将其重新投资到公司的发展之中，而代价就是与众多股东共享利润。
人们期待已久的Bitmain IPO即将到来，而投资者也许希望退后一步思考，同样向自己
提出这些最基本的问题。首先，Bitmain为什么决定上市？我们可以一如既往给出一个标
准答案，其中一定程度上也会包括一些真实信息。比如说，Bitmain希望筹措资金来发展
公司，这是完全合法的。但对于Bitmain来说，有些情有可原的情形使其不得不去进行IPO，而这对于初期投资者来有可能存在风险。
比如说Bitmain的资产负债表。您可以在Bitmain向香港证券交易所提交的申请版本的
第216页找到它。截至6月30日，公司持有价值8.87亿美元的加密货币。其中大多数为比特币现金（BCH）。6月30日，比特币现金的美元价位为大约728美元，这意味着Bitmain大约持有比特币现金市场资本的7%，超过了比特币现金的24小时平均交易量。而Bitmain仅持有（截止至6月20日）3.43亿美元的现金或现金等价物。
由于Bitmain是最初从事生产、推广私有去中心化货币的大型公司之一，注定会遇到一些其它产业中的任何公司从未遇到过的财务问题。最为明显的问题之一就是，它如何收取服务费？当然，完全以现金支付是个很好的选择，但如果Bitmain不接受以自己实际上正在推广的加密货币付款，实质上就会自相矛盾。
为此，Bitmain接受用加密货币付款购买其挖矿硬件和ASIC芯片，这正是为什么它积累的加密货币越来越多，此外还有内部挖矿运营中所产生的收益。但怎么处理这些加密货币呢？无论加密货币支持者有多么坚定，但现实在于加密货币并不具备现金的流动性。现金的基本特点之一就是流动性，使其在完成任何大小的交易之后继续保持相对价值。只要缺乏流动性，那就仅仅是一种资产或保值手段，而不能发挥现金的作用。在某种程度上，这一类别包括了大多数商品，并不需要大费周折地讨论。事实就是如此。举例来说，石油。短短不到六周的时间就下跌了23%。再过六周石油的价位是多少，没人知道。世界各地各行各业都在使用石油，但是它却不是现金。
在加密货币真正成为现金之前，可能还需要许多年，Bitmain仍然需要面对这个复杂的问题。如果Bitmain想要筹措资金，要么拒绝接受使用加密货币购买自己的产品、只接受现金，要么出售加密货币变现。第一种方法会让Bitmain看起来虚伪无比，而第二种方法会极大地损害其资产负债表。因此只有另一种选择——首次公开上市。
这本身并不是一种危险信号。如果Bitmain必须通过上市才能融资，那没什么问题。但这会导致其它结构性问题，导致这次首次公开上市面临风险。让我们来看一看为什么。
当Bitmain三分之二的流动资产（根据最初财务报表公布之后比特币现金价位波动推断得
出）流动性较差时，如何避免资产负债表出现大幅波动？或者，由于Bitmain无法一次性出售比特币，因为这样会导致其大部分资产的市场价格崩溃，那么Bitmain是如何将比特币现金作为直接现金呢来使用呢？那就要采用一些财务技巧。根据其上市前发布的财务报表，Bitmain将加密货币记为“成本，而不是在每个会计参照日重新评估加密货币的公允价值，以期避免加密货币价位短期内出现大幅波动，这有可能会歪曲我们的运营结果以及财务状况。” 这情有可原，但当加密货币的价值出现大幅波动时，如何将这种波动记入损益呢？减去净处置收益并将其作为处置日的总体损益。
换句话说，Bitmain在这里白纸黑字地披露的是，只要它不出售加密货币，那么这些货币就以购置日期的价值记入资产负债表（对于Bitmain来说，其持有的比特币现金价值要高于当前的市场价位）。出售这些资产，它就必须披露账面损失。持有这些资产，严格意义上来说，资产负债表看起来仍然很好，因为这掩盖了价格波动。
当然，这些风险必须加以管理。但在Bitmain IPO申请第179页的加密货币风险管理一章中，
并没有多少实质性的内容。一般来说，这类波动资产的风险管理要包括期权或者期货对
冲。假设某家航空公司希望控制航空燃油价格的波动性，则可以在价位较低时买入看涨期权，或在价位较高时买入看跌期权。或者某家希望控制利率风险的公司会进行利率掉期交易来固定浮动利率借贷成本。然而，这里的问题在于使用加密货币衍生品来控制资产本身的风险并不可行，因为购买足够数量的衍生品来控制资产本身的风险会让资产价格向不利方向发展。缺乏流动性的问题依旧不变。切实的风险管理根本不可能。Bitmain将其风险管理策略概括如下：
我们的财务部会每天监控正常运营所收加密货币的市场价格波动量，并且根据公司运营以及现金流需求建议管理团队将加密货币兑换为标准货币。
言外之意，Bitmain实际上是说它只能为了满足运营和现金流需求才会将加密货币兑换为标准货币。这里没有提到的是它不能出售加密货币来筹措资金去发展公司 。当然，如果
Bitmain需要筹集发展资本，它不能出售其持有的大部分比特币现金（BCH），因为任何大规模的出售行为很有可能会导致其主要资产比特币现金（BCH）的市场价格下滑。Bitmain陷于两难之地，这也是它需要首次公开上市的原因。面前没有其它道路可选。
但是这还会导致另外一个结构性问题。整个加密货币行业得以壮大的政治原因就在于去中心化。这是加密货币如此令人兴奋的原因。这是加密货币如此与众不同的原因。这也是加密货币具有划时代意义的原因。但这也是使得加密货币成为对于像Bitmain这样的市场领导者的一把双刃剑。进入加密货币挖矿设备制造以及挖矿活动本身的门槛几乎已经不复存在。几乎没有任何许可证要求。人们不需要投入数百万美元来申请一张人为导致稀缺的许可证才能开始运营。
在主流行业中，市场主导者一直游说政府施加更多的管制与保护，实质上就是建立起一道保护网来将竞争者排除在外。对于Bitmain或任何在这一行业中力争上游的竞争者来说，能采取这种做法的可能微乎其微。尽管各国政府可能会在不同程度上允许加密货币行业的存在，但政府与加密货币之间建立起共生关系（或寄生关系，取决于从哪一方的角度来看待这个问题）基本是不可能的事情。
再者，行业的客户群体十分集中、易于识别、并且相互联系。有效、高效地游说行业中有影响的人并不难。当然，这非常好，但同时这也让任何公司都无法占有过多的主导地位。
直到现在，Bitmain一直处于主导地位，但它从加密货币行业尚处于襁褓之中时起就一直发挥着主导作用。随着比特币现金成为真正的比特币，而其他竞争币逐步得到认可，其他公司将加入这场竞争——实际上许多公司已经置身其中。在市场最终恢复平衡之前，每家行业参与者的利润率只会越来越低。对于Bitmain来说，利润率已经大幅下降，从2016年的41%下降到了今年的26%。其他挖矿设备制造商逐渐壮大并参与竞争，例如Canaan、eBang、Whatsminer以及其它厂商，Bitmain的利润率还将进一步下滑。
Bitmain的IPO估值将基于其未来的增长预测，而这主要基于它已经披露的财务信息以及过去在整个行业刚刚起步并且进入前所未有的阶段时所披露的信息。Bitmain作为先行者之一最初取得的巨大成功不可能长期延续下去。无论从最初市场竞争的角度来看，还是从加密货币的中期价位来看，闪电战的时代已经终结。如果Bitmain初期获得市场资本是由于早期的增长预测，那么随着主流投资者开始意识到这样的增长率无法长期维持时，其股价将会开始下滑。
哈希算力大战带来的风险
对于Bitmain及其IPO，让财务状况变得更有风险的是，Bitmain正在准备就11月15日比特币现金协议升级打一场代价极为昂贵的哈希算力战争。这场哈希算力大战将会让Bitmain面临耗费更多现金或加密货币储备的危险。
在即将到来的比特币现金哈希算力大战中，Bitmain站在Bitcoin ABC的阵营。Bitmain从比特币现金诞生以来一直支持长期处于领导地位的比特币现金（BCH）全节点实现。然而，
由于Bitcoin ABC技术路线图寻求改变最初的比特币协议，CoinGeek（最大的比特币现金
挖矿组织）对此持不同意见，转而支持新兴的比特币现金实现竞争对手Bitcoin SV。 Bitcoin SV，意为比特币“中本聪愿景”（Satoshi Vision），旨在实现中本聪最初在比特币白皮书和协议中描述的愿景。与ABC等其它竞争比特币现金实现不同，Bitcoin SV的路线图是恢复最初的中本聪协议，让其保持稳定，使其可以实现大规模扩容，并且给大公司信心去进一步发展壮大比特币现金。
在这场大战中，与CoinGeek一道支持Bitcoin SV的还有一家主要区块链研发公司nChain，
其拥有自己的下属挖矿组织BMG Pool。nChain首席科学家克雷格·怀特博士（Dr. Craig Wright）的个人项目SVPool以及新矿池Mempool均支持Bitcoin SV。根据Coin.dance公布
的数据，截至2018年11月12日，比特币现金的总挖矿哈希算力中，大约62%到72%支持Bitcoin SV。因此，在即将到来的哈希算力大战中，Bitcoin SV已经获得了超过了自己所需的绝对多数算力支持。
据报道称，Bitmain正准备启用位于新疆的矿机，数量在9万甚至15万台之多，而在哈希算力大战中将用其支持Bitcoin ABC。如果这一报道属实，人们一定想知道已经向Bitmain
订购的矿机但尚未收货的客户听到自己购买的设备将被Bitmain挪作他用后感受如何。
此外，有消息称，Bitmain将“租赁”或补贴临时哈希算力来从比特币网络迁移至比特币现金网络，从而在哈希算力大战中为Bitcoin SV提供更有力的支持。这些租赁哈希算力将来自
Bitmain控制的比特币矿池（Antpool和BTC.com）或与其关系密切的矿池（BTC.top）。如果矿工在哈希算力大战中转而挖掘比特币现金所获得的收入要低于留在比特币网络中原本可获得的收入，就要求Bitmain每天支付数百万美元来补贴矿工。 CoinGeek与nChain已经宣布在这场哈希算力大战中将坚持到底，从而捍卫最初的比特币愿景。因此，如果Bitmain每天支付数百万美元来租赁比特币哈希算力来推动其对比特币现金的理念，很快就会耗尽数千万美元的现金或加密货币储备。这笔钱当然要来自于之前的投资者或者Bitmain股东拥有权益的资金，而Bitmain需要履行受托人责任来正确地管理资金。
Bitmain IPO未来的投资者不大可能愿意用自己投入的资金来支持一只加密货币的持久战，
而Bitmain的经营支持着多种加密货币。
因此，这场哈希算力大战将发生在Bitmain及其IPO极为脆弱的时刻，而Bitmain的投资者和股东应当提出这样一个简单的问题： Bitmain改变比特币现金的理念是否如此重要，以至
于可以去冒着风险在未来长时间内耗尽其巨大的现金与加密货币储备。
结论
一家核心加密货币公司发起IPO的概念本身就会带来一些利益冲突。一家挖掘私营去中心化货币、与政府中央银行管制相竞争的公司运用中心化政府管制市场去筹措现金，会让人心里感觉不是滋味。您越是坚信比特币现金是未来的货币，就更难以去解决这种两难之局。
Bitmain需要IPO，但却质疑整个加密社区是否需要这种融资机制。未来一两年中，这种二元论的结论将变得更加显而易见。
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
The post Bitmain首次公开上市（IPO） 带来的危机以及Bitmain在比特币现金哈希算力大战中的战斗 appeared first on Coingeek.
When thinking about any specific initial public offering, it’s helpful to take a step back and ask the most basic of questions. Why do companies go public at all? Why are there capital markets in the first place? What’s the point of selling shares in a company? The answer is, of course, in order to raise money that will ultimately be reinvested in growth at the price of sharing profits with stockholders.
The long-anticipated Bitmain IPO is imminent, and investors may want to take a step back and ask themselves the same basic question. Why is Bitmain going public in the first place? We can always just give the standard answer that no doubt has some truth to it. Bitmain wants to raise money to grow the company, and that’s perfectly legitimate. But in the case of Bitmain, there are extenuating circumstances that make an IPO almost imperative, and that could be dangerous for initial investors.
Consider Bitmain’s balance sheet. You can find it on page 216 of their Application Proof to the Hong Kong Stock Exchange. As of June 30, 2018, the company held USD $887M worth of cryptocurrencies. Most of that is held in Bitcoin Cash (BCH). On June 30th, the USD price of BCH was around $728, which means that Bitmain holds about 7% of the BCH market cap, more than the currency’s average 24-hour trading volume. Bitmain only held (as of June 20) $343M in cash or cash equivalents.
In mainstream industries, market leaders constantly lobby for more and more government regulation and protection that basically builds a protective wall to keep out competitors. It is highly unlikely that Bitmain, or any other contender for market leader in this industry, will be able to do this. While governments may tolerate the cryptocurrency industry to a greater or lesser extent, a symbiotic (or parasitic, depending on what side you’re on) relationship between government and cryptocurrencies is a nonstarter.
Further, the industry’s customer base is concentrated, easily identifiable, and interconnected. It doesn’t take much effort to advertise to the movers effectively and efficiently. This all is of course a wonderful thing, but at the same time it serves to keep any one firm from being too dominant.
Up until now, Bitmain has been dominant, but its dominance has only been through the infant bubble phase of the cryptocurrency industry. As BCH as the true Bitcoin and altcoins gain more acceptance, other firms will enter the fray – indeed many already are – and profit margins for everyone will start to fall until the market eventually finds equilibrium. For Bitmain, profit margins have already fallen substantially, from 41% in 2016 to 26% this year. They will continue to fall as competition from other mining rig manufacturers ramps up – such as from challenges Canaan, eBang, Whatsminer, and more.
Bitmain’s IPO valuation will be based on growth projections that will be based on the financial disclosures it has already made, disclosures based on the past, on the beginning of an entire industry in the rare phase when it was on fire. Its initial wild success as one of the first movers in mining are unlikely to be sustained long term. The blitz is over, both in terms of the initial lack of competition, and in terms of the price of cryptocurrencies themselves in the medium term. If Bitmain’s initial market cap is based on growth projections using its early growth figures as a starting point, its share price will likely start to deteriorate as mainstream investors begin to realize that those growth figures are unlikely to be sustained.
Hash War Dangers
Making financial matters even more risky for Bitmain and its IPO, Bitmain is preparing to fight a very expensive hash war over the BCH protocol, which will upgrade on November 15. This hash war could lead Bitmain to perilously deplete even more cash or cryptocurrency reserves.
In the upcoming BCH hash war, Bitmain is backing Bitcoin ABC, the historically lead full node implementation for BCH which it has been supporting since the BCH was birthed However, due to disagreements with Bitcoin ABC’s technical roadmap which seeks to change the original Bitcoin protocol, CoinGeek (the largest BCH miner) is backing a new competing BCH implementation called Bitcoin SV. Bitcoin SV, which stands for Satoshi Vision, is designed to fulfill the vision set out by Satoshi Nakaomoto’s original Bitcoin white paper and protocol. Unlike other competing BCH implementations such as ABC, Bitcoin SV’s roadmap is to restore the original Satoshi protocol, keep it stable, enable it to massively scale, and allow major businesses to confidently build on top of BCH.
It has been reported that Bitmain is preparing to activate 90,000 to even 150,000 new mining rigs in Xinjiang, and itself operate them to support Bitcoin ABC in the hash war. If that is true, one must wonder whether customers who have ordered mining rigs from Bitmain but have not yet received new rigs will be happy to know units are being re-directed for Bitmain’s own purposes.
The hash war comes at a fragile time for Bitmain and its IPO, and should make Bitmain’s investors and shareholders ask this simple question: is Bitmain’s ideological view of changing BCH so important as to risk depleting huge amounts of Bitmain’s remaining cash and cryptocurrency reserves for a long period of time?
Conclusion
The concept of an IPO for a cryptocurrency mainstay is itself something of a conflict of interest. A company in the business of mining decentralized, private currency that competes with government central-bank-controlled fiat, itself utilizing centralized government-regulated markets in order to raise fiat cash, can leave a sour taste in your mouth. The deeper you believe in BCH as the future of money, the harder it is to square the circle here.
Bitmain needs this IPO for itself, but it is doubtful that the broader crypto-community needs it as a whole. In a year or two, that dichotomy may become glaringly evident.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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Cryptocurrency miner company Bitfury has announced a private placement of $80 million, the latest high growth blockchain company to draw significant support from global institutional investors.
The placement was led by Korelya Capital, an investment firm with the backing of Korea’s Naver Group, alongside investors such as Argenthal Capital Partners and Mike Novogratz’s Galaxy Capital. Valery Vavilov, Bitfury’s co-founder and CEO, said the funding marked a strong year for the company, one of Europe’s emerging blockchain unicorns.
“This private placement reflects our achievements, and it recognizes our ability to address adjacent market segments in high-performance computing, including in emerging technologies like artificial intelligence (AI),” Vavilov said in a statement. “The institutionalization of blockchain and cryptocurrencies, partnered with the opportunity of these emerging technologies, is a natural expansion opportunity that Bitfury will build on—in 2019 and beyond.”
Antoine Dresch, of Korelya Capital, said Bitfury has the expertise and leadership to drive more innovation in the blockchain sector. He noted, “Bitfury has grown from a small startup to the largest western blockchain unicorn, equipped with world class leadership and expertise, consistently delivering innovative solutions across the entire blockchain ecosystem.”
The news comes on the heels of reports that the crypto miner manufacturer has been looking at different strategic options to raise funds, such as holding an initial public offering (IPO) as early as 2019, or raising debt financing as well as selling a minority stake in the company.
Since its launch in 2011, Bitfury has been quite active in cryptocurrency and blockchain activities. Bitfury, the largest non-Chinese-owned company, develops Bitcoin blockchain software and provides infrastructure for Bitcoin mining. The company also developed products like a digital ledger for cryptocurrency transactions, chips for mining machines and software for institutions, governments, and companies.
The recent private placement, according to Bitfury Executive Vice Chairman George Kikvadze, was a vote of confidence in the direction of travel for Bitfury, and an endorsement of their growth strategy. He explained, “This private placement will take our corporate governance to the next level, broaden our financial strategic options, and ideally position us for our next phase of growth as the market matures.”
The funding is the latest example of a significant investment in the blockchain space, as more institutional and fund investors turn to opportunities in cryptocurrency and blockchain tech.
Regarded as pioneers in blockchain development, Bitfury works with governments and large corporations to develop and deploy real-world use cases for the technology. The funding will support the company as it continues to grow in European markets, at a time of increasing interest from large organisations worldwide.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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Cryptocurrency miner manufacturer Bitfury is reportedly looking at various strategic options to raise funds, including holding an initial public offering (IPO). Other possible fundraising options include raising debt financing as well as selling a minority stake in the company. Sources familiar with the matter, however, noted that Bitfury has yet to decide on which fundraising strategy to punt on.
According to Bloomberg report, if Bitfury holds the initial public offering, it will be the largest listing in Europe. The crypto start-up has reportedly contracted global investment banks ahead of the potential IPO. Bitfury is looking into listing in Amsterdam, Hong Kong or London as early as 2019, the report noted.
Going public will increase the value of Bitfury to somewhere between $3 and $5 billion in the next two years. However, this evaluation is merely an estimate and could change depending on the market, according to the report.
If Bitfury pushes through with its plans, it’ll be the latest crypto manufacturer to raise funds via IPO. This year, Canaan Creative and Ebang Communication have submitted their prospectus to the Hong Kong Stock Exchange. Bitmain also announced its plans for IPO; however, recent reports indicate the company is suffering from inventory losses, a lack of new manufacturing and the dwindling crypto mining market, which has already caused Nvidia to pull back on its production and financial forecasts.
Since its launch in 2011, Bitfury has been quite active in cryptocurrency and blockchain activities. Bitfury, the largest non-Chinese-owned company, develops Bitcoin blockchain software and provides infrastructure for Bitcoin mining. The company also developed products like a digital ledger for cryptocurrency transactions, chips for mining machines and software for institutions, governments, and companies.
Last month, Bitfury Group released its latest cryptocurrency mining application, the Bitfury Clarke. The specific integrated circuit (ASIC) chip is fully customized for SH 256Bitcoin mining. In the announcement, Bitfury announced it was planning to include the new chips in its mining centres in Iceland, Canada Norway, and Georgia.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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Bitmain’s planned initial public offering (IPO) was already facing significant resistance due to the myriad of issues and controversies plaguing the company. However, the future now looks even less bright, thanks to President Donald Trump.
The ongoing trade war between the U.S. and China will undoubtedly impact cryptocurrency mining equipment. This past June, the U.S. changed the classification of the mining rigs from “data processing machines” to “electrical machinery.” Electrical machinery is subject to an import tariff of 2.6%—not unreasonable for any product. However, because of the trade war, the tariff schedule has been updated significantly. Instead of 2.6%, mining equipment manufacturers are now looking at the possibility of paying 27.6%.
Competition in the mining equipment manufacturing space is getting more serious. More than half of Bitmain’s business relies on overseas sales. With the increased tariffs, the company will have a difficult, if not impossible, time offering products at prices that can beat those of its competitors.
Some of Bitmain’s primary competitors, such as Squire, use chips manufactured in South Korea. These are not subject to the tariff schedule, nor are those produced in Taiwan. This will not only give companies that source products from these countries an edge, but it will also give rise to new competitors who will threaten Bitmain’s ability to act in the mining space.
The company even recognized in its IPO filing that there existed the possibility it could be impacted by external forces. It said that its revenue could see declines based on tax rates “due to economic and political conditions.” As Bitmain is already losing ground to competitors who are now producing mining rigs that are faster and more efficient, the tariffs could be the proverbial nail in the coffin that brings an end to the highly questionable IPO.
CoinGeek was already prepared for this eventuality, which is why the introduction of Antiguan-based bComm Association‘s Bitcoin SV (developed by nChain) is vital to the mining community. The full-node implementation software is now available and is quickly gaining favor. Don’t just take my word for it—come check it out during Miner’s Day at the upcoming CoinGeek Week Conference in London next month.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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Our sources tell us that Bitmain executives have promised to “disappear” anyone who crosses them inside China.
While doing the background research for another Bitmain article, our sources told us of the disturbing threats, and we were able to confirm these with our other sources close to Bitmain.
I don’t believe this was a Google translate error, where they meant to say that they’d beat their competitors fair and square in the free marketplace but instead like the old gangsters in Las Vegas, they’d drop them in a hole in the middle of the Nevada desert.
Bitmain released a prospectus, in advance of their long-planned IPO, to lukewarm reviews as the document raised more doubts about the company’s long-term viability.
According to a Medium post by Ken Lu, several points should concern every investor particularly in referring to slide 30 of their investor deck, Bitmain misrepresented its net profit.
To quote Lu, “…misrepresenting this and to such a degree is nothing short of financial fraud.” (You can read the post here.)
The prospectus highlighted the company’s unsold hardware and their warehouses of unsold technology which at a time was the best on the market but has recently been surpassed by new players who are producing faster and more efficient miners leaving the prospects of millions of dollars in inventory going unsold and written down for massive losses.
In recent weeks, Pangolin released its well-received Whatsminer M10 ASIC Miner , while initial test results for the upcoming Squire Miners indicate 1.5x more hashing capabilities while consuming 50% less energy than the top of the line Bitmain ASIC miners.
Interestingly, the Pangolin miner comes from the mind of former Bitmain technologist Yang Zouxing. Bitmain has struggled to replicate the success they had with Yang Zouxing who did the heavy lifting with chip design.
Their inability to combat the corporate brain drain as their top tech minds continue to leave the company have put Bitmain in a dire situation.
Attempting to defraud investors and now issuing veil threats of violence against people who dare compete with them in a free market isn’t the behaviour of a stable and trustworthy company deserving of investors cash. It’s the behaviour of gangsters who are desperate for money hoping a hail mary IPO will give them some semblance of hope at surviving in this new competitive marketplace.
This all adds smoke to the Bitmain Bankruptcy rumours.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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Only a week ago, it was reported that cryptocurrency mining company Bitmain was preparing to move forward with its long anticipated initial public offering (IPO). The announcement may have had a positive impact on the Bitcoin BCH price, but that excitement was short-lived and now the IPO is beginning to be scrutinized in greater detail. The results are even more disconcerting than previous analysis of the company revealed.
The release of Bitmain’s IPO application (in pdf) has led to more questions about the company’s solvency. Around 28% of the company’s assets are in cryptocurrency, leading some to believe that Bitmain is essentially about to introduce a crypto fund through the IPO. However, this is more than likely not the case, as Bitmain’s physical inventory, for example, provides the company with a certain amount of diversification.
However, that physical inventory has decreased significantly in value. This is due to a market that rapidly shrunk in size, leaving Bitmain with product that it couldn’t distribute. Therein lies one of the problems – having inventory and no market is a dead end.
The lengthy IPO document, in one instance, leads readers to believe the company is a manufacturing firm (despite 50% of its products ultimately failing) and, in another, that it is offering a mining stock. It is also a company that offers services to other sectors, further exasperating attempts to define its operations.
A post on Medium by Ken Lu makes four startling revelations about the company. Lu dissected the IPO in great detail and also reviewed the company’s pre-IPO Investor deck. What he discovered should give pause to anyone considering making an investment in the company.
Lu points out that Bitmain misrepresented its net profit for last year. Referencing slide #30 of the Investor deck and page 307 of the prospectus, he points out that there is a huge $550-million mismatch between Bitmain’s stated net income and its audited income. Lu asserts, “This massive US$550 [million] Net Income ‘miss’ translates into implied PE multiples being significantly inflated. Many investors relied on this essential figure for doing the analysis, and misrepresenting this and to such a degree is nothing short of financial fraud.”
Bitmain also allegedly misrepresented its net profit target for the current year. Lu points out, “[I]nvestor deck (slide #30) states Net Profit Target for 2018 at US$1.8 [billion] which we now know is a complete sham. But did [Bitmain CEO Jihan Wu] and Directors know of this while fund-raising for Pref B and B+ rounds during summer? This is the key question Hong Kong courts will be asking. And the answer is undoubtedly yes!”
Lu also points out that Bitmain was creative with its financial reports this year. He indicates that the company had tied together the results from the first two quarters without showing the individual quarter results. The first quarter was highly successful, but the second quarter was a virtual failure. This shows a tendency of the company to try and fool investors with smoke and mirrors.
The last misrepresentation comes through Bitmain’s accounting of its inventory. He calls out Bitmain for not breaking down “its actual inventory of cryptocurrency and recording it at cost vs true market value. It’s very odd that for something that constitutes 28% of Assets is a complete ‘black box’ to investors.” Lu adds, “Bitmain holding close to a US$1billion in a ‘black box’ that can at any time plummet to zero, is surely not something the Hong Kong regulator will take lightly.”
Lu concludes, “Investors in the recent pre-IPO round were misled as to the accuracy of the data, and considering complexity and opacity of Bitmain’s business (compared for example to its competitors Canaan and EBang), Hong Kong Regulators will be taking a very close look at the business model, requiring more clarity and explanation. All of that will require more time, and that will coincide with Bitmain having to disclose even more disastrous Q3 results, which will even further damage investors’ appetite for the IPO.”
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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