Today, bitcoin mining is a big investment, but the previous success of the world's largest chipmakers will result in a bright future?
As demand falls in the cryptocurrency industry, three of the biggest names in Bitcoin mining are moving up to collect billions through initial public offerings (IPOs). Bitmain, Canaan and Ebang, all Chinese manufacturers of specialized Bitcoin mining chips, will start their IPOs in Hong Kong before the end of the years.
Bitmain, the most important of the three, plans to raise almost $ 3 billion through their IPO, scheduled for late August or early September. Supporting the huge valuation attributed to the company is an undeniably successful financial track record. In 2017, Bitmain generated an incredible turnover of $ 2.5 billion and achieved a profit of $ 1.1 billion in the first quarter of 2018. Approximately 96% of this revenue comes from the sale of their crypto-mining equipment, while the rest comes from effective mining. digital currencies.
Canaan and Ebang have also shared similar success in the encrypted markets since their inception in 2016. Last year, Canaan generated revenues of $ 190 million, and Ebang closely followed with $ 135 million. Both of these companies plan to raise over half a billion dollars with their upcoming Hong Kong IPOs.
Although the financial records of these Bitcoin mining giants clearly reflect the previous success, the cryptocurrency industry is facing a downward trend in 2018, mostly fueled by the decline in the Bitcoin price. To add to the FUD (Fear, Uncertainty and Doubt), Bitcoin mining equipment is highly specialized, and if the Bitcoin network changes its mining algorithm (which is possible in a decentralized network like Bitcoin), much of the 39; equipment produced by Bitmain, Ebang and Canaan will become obsolete. A third risk for potential investors lies in the limited supply of Bitcoin, with only 21 million Bitcoins to be extracted, the future of the Bitcoin mining industry would seem destined for an abrupt end. For these reasons, the next IPOs are considered by many to be a "litmus test" to determine if the market sees the real value behind these companies.
Disclaimer: the information contained in this document is provided without considering personal circumstances, therefore it should not be interpreted as financial advice, investment recommendation or offer or solicitation for cryptocurrency transactions.