What would a Bitmain IPO mean for the Industry?
The baby-faced and enigmatic leader of Bitmain is possibly mulling an IPO. The Chinese company, full name Bitmain Technologies Ltd., would be a huge move for the entire cryptocurrency industry. Last year, Bitmain earned $2.5 billion and would be a similar company to Nvidia or MediaTek Inc. – charting in the $8 billion range in market cap.
However, as stated previously, Wu and his partner, Micree Zhan, are notoriously secretive. Still, given the uncertainty surrounding digital assets and the limited public information about Bitmain, any estimate of the Beijing-based company’s value — and its owners’ wealth — inevitably involves a lot of guesswork.
But, if Wu did do an oversee listing, Bitmain would be open for the world to see and this level of transparency would be a boon to the cryptocurrency industry. The company is a force in the industry and obviously holds a dominant share of the ASIC market – application-specific integrated circuit – around 80% to be specific. The company’s Antminers — server-sized boxes filled with dozens or hundreds of identical high-powered chips — sell for a few hundred to a few thousand dollars and are typically bought in bulk by professional operators with access to cheap electricity.
In an effort to diversify its holding base for investors, Bitmain is branching out into artificial intelligence. The company has already released several products through Sophon, its AI chip brand, and it has announced plans to release two more chip generations in the coming months. Wu believes that in five years as much as 40 percent of its revenue could come from its AI division.
Should it go forward, Bitmain could attract a significant valuation from Hong Kong investors due to first mover advantage.
Overall, China has generally been optimistic towards blockchain technology and the cryptocurrency industry, as reflected in the government’s reluctance to crackdown on mining companies and mining equipment manufacturers like Bitmain and Canaan.
More importantly, in May, the Chinese government released its public blockchain rankings that ranked Ethereum as the best blockchain network in the world based on its applicability and technology. Analysts suggested that if the Chinese government cracked down on the cryptocurrency industry due to their decentralized nature, it would not have ranked an open and decentralized blockchain network like Ethereum as the top blockchain protocol.
Many investors have turned toward the hardware sector of cryptocurrency as the industry has faced more lean times recently.