[2019-11-12] Bitcoin Mining IPO Could be the New Gold Rush

[veleten]

This is going to be very interesting:
Two bitcoin mining giants are fighting for the US market.
Bitcoin mining giants Bitmain Technologies and Canaan Creative seem to have found a new area of competition — launching a U.S. IPO. Both companies are set to go head to head in trying to one-up the other in what could be the first-ever crypto-related public offering in the United States.

Both companies had a rough 2018 with bear markets and failed IPO attempts in China affecting them. Canaan's reported net revenue for the first 9 months of 2019 was less than a half of what it was the year earlier and Bitmain closing down its Israeli office and laying off 50 percent of its workforce.
Nevertheless ,their chip prepayments to TSMS have increased , so this could be a signal for recovery.
Read more here: https://bravenewcoin.com/insights/chinese-mining-giants-file-for-ipo

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[magneto]

I doubt it. People now understand that bitcoin mining isn't necessarily something that will get you rich quick.

IPOs also pose more restrictive measures in terms of investors, since investors will likely have to have a higher minimum investment as well as thorough KYC. This is much higher barriers to invest compared to, say, an ICO or even an IEO.

Perhaps institutional investors will scoop up the equities, but if not, I don't see it generating as much hype as you imply.

[bbc.reporter]

It might only be a gold rush to the manufacturers of the Asic hardware themselves because money collected from their IPO will signify expansion of the business hehe.

[crwth]

With the onward coming of different companies, IPO is one of the things they would want to do. Depending on the reasons on why they want to go public, it would be beneficial for them. So having an IPO could improve their current situations now. The benefits are a lot and what I could think of are:

• Increase in capital
  • More and more people would have a chance to invest in the company
• Liquidity for investors and employees
• More people would recognize the company

I do think it would be beneficial for everyone who believes in Bitcoin to be used because it's going to be exposed to more people who would probably invest in it too. We still have to wait for that to happen. I hope you could update this also if anything happens.

[squatter]

I doubt it. People now understand that bitcoin mining isn't necessarily something that will get you rich quick.

These are mining hardware manufacturers, not merely miners. Bitcoin-related stocks can also sail pretty high just on the basis of greater fools and pure hype.

Take the example of Bioptix, Inc. Their company and share price was in the dump, then in October 2017 they changed their name to Riot Blockchain, Inc. and began mining bitcoins and investing in blockchain companies.

The price of RIOT went up 800% over the next two months.

There are plenty of stock market investors who will seek out exposure to the Bitcoin markets this way.

[1Referee]

It might only be a gold rush to the manufacturers of the Asic hardware themselves because money collected from their IPO will signify expansion of the business hehe.

Don't forget the investors owning the stock. It's something we have seen happen with Gold stocks (stocks of companies mining Gold) as well. It's like a leveraged product tied to the price performance of the asset, which tends to exaggerate moves in both up and down directions. Gold believers tend to allocate most of their capital to Gold stocks, and so does Peter Schiff.

Bitmain is super dependent on what Bitcoin's price does, which means that you can expect their stock to react to that quite perfectly on trading days. It will create plenty of new arbitrage opportunities for traders. It might even bring new traders to spot exchanges trying to exploit these arbitrage opportunities, and that translates into more liquidity.

I'm however not sure about Bitmain's coin balance as they are so heavily invested in bcash. It might turn out to work against them yet again. We'll see.

[Harlot]

The special thing about the mining rig manufacturing companies os that they aren't that affected when it comes to the bear market. Unlike crypto exchanges where they will always lay off some workers when they need to do coat cutting because of the bear market mining rig manufacturers don't since there will always be a demand for their product. What I don't understand though is if they failed being listed in their own country why do they think it would be different on bringing it to another country much more in the US where they have a big trade war on going.

[bbc.reporter]

It might only be a gold rush to the manufacturers of the Asic hardware themselves because money collected from their IPO will signify expansion of the business hehe.

Don't forget the investors owning the stock. It's something we have seen happen with Gold stocks (stocks of companies mining Gold) as well. It's like a leveraged product tied to the price performance of the asset, which tends to exaggerate moves in both up and down directions. Gold believers tend to allocate most of their capital to Gold stocks, and so does Peter Schiff.

Bitmain is super dependent on what Bitcoin's price does, which means that you can expect their stock to react to that quite perfectly on trading days. It will create plenty of new arbitrage opportunities for traders. It might even bring new traders to spot exchanges trying to exploit these arbitrage opportunities, and that translates into more liquidity.

I'm however not sure about Bitmain's coin balance as they are so heavily invested in bcash. It might turn out to work against them yet again. We'll see.

Also do not forget that everything does not depend on bitcoin. The risk of owning a stock would also depend on how well the Asic manufacturer's performance is as a company.

[hello_good_sir]

Don't think they are going to get a lot of attention, Bitcoin mining was only really big from 2017 to early 2018, and it has definitely died off in recent years.

Unless they get a lot of attention from their institutional investors, I doubt we'll be able to see a lot of hype and success from their operations, both companies need to downsize their operations in the future years.

 

[CryptoBry]

This is going to be very interesting: Two bitcoin mining giants are fighting for the US market. Bitcoin mining giants Bitmain Technologies and Canaan Creative seem to have found a new area of competition — launching a U.S. IPO. Both companies are set to go head to head in trying to one-up the other in what could be the first-ever crypto-related public offering in the United States.

This is very interesting, indeed. I would be following the IPO of these two Bitcoin mining companies and how the public especially in the USA are going to react to them. Will there be a critical number of supporters for these two companies, so they can end their respective IPO with great success? I am hoping so because if these can failed to achieve the minimum target then somehow this can be a signal for the whole cryptocurrency industry. Just as Bitcoin mining reward is about to go halved and maybe a big bull run happen, maybe these IPOs can be on the right timing. 

[anoufal]

Is there any information on the profitability of this activity ?

[NeuroticFish]

Although selling crypto miners is (expected to be) a good business, I'm not sure what they would do with the IPO money.. expand their production in US to avoid tariffs?! But then the production will also get (much) more expensive.
So I am not sure who will be the ones who would benefit more - the investors or the companies? I guess that's the companies.
So it's not really a gold rush.

[squatter]

Bitmain is super dependent on what Bitcoin's price does, which means that you can expect their stock to react to that quite perfectly on trading days. It will create plenty of new arbitrage opportunities for traders. It might even bring new traders to spot exchanges trying to exploit these arbitrage opportunities, and that translates into more liquidity.

It won't create arbitrage opportunities since it's a completely different asset, but it will follow Bitcoin price trends just like RIOT does. When RIOT switched their business model to Bitcoin mining and blockchain venture capital in October 2017, they outperformed the Bitcoin market by 100% through December.

There are lots of investors who won't touch bitcoins but will want exposure through the stock market. I'm interested to see how Bitmain stock would perform in a 2017-like context. The share price gains could be quite exaggerated and out of touch with actual earnings.

[gentlemand]

'According to a report by research company Hurun, there are currently eleven blockchain startup unicorns, including Binance, Coinbase, and Ripple.'

I'd love to see Ripple whining about the securities possibilities whilst also running an IPO.

As for anyone who puts money into this, rather them than me. As we've seen countless times it can turn on a dime and bone you in places you never knew you had. No one should go anywhere near mining without an appetite for epic craterage and that's before you take Bitmain's erection for Bcash into account. That's REALLY not a good look if you want someone else's money.

[1Referee]

Also do not forget that everything does not depend on bitcoin. The risk of owning a stock would also depend on how well the Asic manufacturer's performance is as a company.

The health of the company is solely based on Bitcoin. If Bitcoin isn't going up, there is no real demand for additional mining gear. If there is no demand for additional mining gear, the company stock is worthless. Bitcoin is the center of this whole space. If it's going down, it takes the whole space with it. Even creating hardware to mine other algorithms won't do much in that case.

[gentlemand]

The health of the company is solely based on Bitcoin. If Bitcoin isn't going up, there is no real demand for additional mining gear. If there is no demand for additional mining gear, the company stock is worthless. Bitcoin is the center of this whole space. If it's going down, it takes the whole space with it. Even creating hardware to mine other algorithms won't do much in that case.

This is an interesting angle I hadn't really considered. I wonder how many potential investors understand the difference between algorithms and what different machines can and can't mine. A heavyweight endorsement from a big name, not that I believe that'll happen, would basically be betting on Bitcoin and Bitcoin only and that might not be something they're willing to do.

At least GPU manufacturers can treat it as a side show though I wonder what their feelings are about being encroached on so violently by a market they had no plans to cater for.

I guess Bitmain might try to push their asics for other coins as a feature but as far as I can tell every other project furiously attempts to resist them.

[1Referee]

I wonder how many potential investors understand the difference between algorithms and what different machines can and can't mine. A heavyweight endorsement from a big name, not that I believe that'll happen, would basically be betting on Bitcoin and Bitcoin only and that might not be something they're willing to do. 

I don't think anyone has problems understanding the difference between the various machines mining specific algorithms. This is also why it's not smart from a business perspective to only focus on Bitcoin because you want to sell your machines to as many people as possible.

At least GPU manufacturers can treat it as a side show though I wonder what their feelings are about being encroached on so violently by a market they had no plans to cater for. 

Based on the stocks of both companies they don't seem to be much affected. In fact, AMD is currently near a 10 year high. Lower gpu demand doesn't seem to have affected them at all. Nvidia on the other hand has seen a massive decline in Q4 of 2018, but that can't be solely due to poor gpu sales, and currently they are on the way back up.

I guess Bitmain might try to push their asics for other coins as a feature but as far as I can tell every other project furiously attempts to resist them.

Smaller more centralized projects can fork at any time to fight against asics, but that's not possible with coins such as Ethereum and to a lower degree Litecoin, which both increasingly see more asic presence on the network. The Ethereum developers and community probably no longer care with pos coming up.

[figmentofmyass]

At least GPU manufacturers can treat it as a side show though I wonder what their feelings are about being encroached on so violently by a market they had no plans to cater for.

encroached on? increased demand seems like a good problem to have, even if market demand is more volatile. the 2016-17 bull market was a massive boon for companies like NVIDIA and AMD.

Also do not forget that everything does not depend on bitcoin. The risk of owning a stock would also depend on how well the Asic manufacturer's performance is as a company.

The health of the company is solely based on Bitcoin. If Bitcoin isn't going up, there is no real demand for additional mining gear. If there is no demand for additional mining gear, the company stock is worthless. Bitcoin is the center of this whole space. If it's going down, it takes the whole space with it.

that's true---if bitcoin price is consistently trending down. in that case, they are screwed no matter what. but bbc.reporter is right that a bullish bitcoin isn't enough to save a mismanaged company, especially as the manufacturing space gets increasingly competitive.

bitmain's IPO plans always felt like a cash grab to me. they are cashing out ASAP while they're still at the top.

[rodel caling]

Oh wow glad to heard meaning mining is profitable, the two companies want to get profits in mining because they know the possible huge earnings, both companies take risk because they know mining can't get quick profits need a lot of patience and considered also the electricity consumption.

[bbc.reporter]

At least GPU manufacturers can treat it as a side show though I wonder what their feelings are about being encroached on so violently by a market they had no plans to cater for.

encroached on? increased demand seems like a good problem to have, even if market demand is more volatile. the 2016-17 bull market was a massive boon for companies like NVIDIA and AMD.

Also do not forget that everything does not depend on bitcoin. The risk of owning a stock would also depend on how well the Asic manufacturer's performance is as a company.

The health of the company is solely based on Bitcoin. If Bitcoin isn't going up, there is no real demand for additional mining gear. If there is no demand for additional mining gear, the company stock is worthless. Bitcoin is the center of this whole space. If it's going down, it takes the whole space with it.

that's true---if bitcoin price is consistently trending down. in that case, they are screwed no matter what. but bbc.reporter is right that a bullish bitcoin isn't enough to save a mismanaged company, especially as the manufacturing space gets increasingly competitive.

bitmain's IPO plans always felt like a cash grab to me. they are cashing out ASAP while they're still at the top.

Also, if Bitmain's success depended only on bitcoin, we should go to the source of success. Bitmain's stock would appear like another speculative investment that is betting on the company, that is betting on the success of bitcoin hehehehehe.