Topic: [2019-11-12] Bitcoin Mining IPO Could be the New Gold Rush (Read 274 times)

I've just learned that before they announced that they are planning to have an IPO in the US they have relieved their co-founder, Micree Zhan, from all of his roles in the company. I believe that one of the reasons why might be he is against having an IPO in the US or at least he still thinks that this is not the best possible time to do it. Or even if there are other reasons why it would still involved them not agreeing on where the company will go in the future. With this news and about their possible connection against the arrest of their ex-employee, Zuoxing Yang, they are just making their chances of having an IPO in the US lower since they are under the microscope with the SEC and they'll be happy to find any kind of dirt just to use against them.

The important thing here is whether the SEC would allow them to list and two whether the public whom they are planning to raise the capital from are really ready for a mining business. A company into mining wanting to go public would be exposing itself to several scrutiny and even some bad mouthing that they themselves are not envisaging. One of those is from the environmentalist who believes that mining would lead to more damage to the ozone layer and since government and corporate organisations are moving towards green energy, I expect opposition from that angle which could be a valid point from those who are on the negative with crypto and its related activities.

It depends, but for a majority, I think it was actually profitable.
Leaving aside the outrageous prices in December-January, if you bought an S9 anywhere except that period and maybe 2-3 months before the rushed launch of the s15 and s17 you would have made a profit.
Same for a lot of other gear except some very late deliveries or ...butterflylabs stuff.

Of course,  even if we managed to get some data from multiple sources it will be totally wrong to use it for future planning, the price surely won't go up  x10 times in year, even if that happens there is a lot of unprofitable gear that would be turned back on grabbing a piece of the rewards, and so on and on.

And there is a new flaw in this model, it worked when the gear was 500-1000$ a piece and it was pulling at 1200-1400w like the s7 and s9 series, everyone could give it a try, the latest stuff is well above 2000-2500 and good luck running it in your apartment unless you really want to punish your neighbors. The s7 was advertised at 60 Db and the s17 at 80 Db and I can tell you for sure the numbers were/are pure bs.

Whether miners make any money from their products isn't the concern of these companies. All they're in the business of is offering the means to do it which is a totally different proposition. I'd love to know how many machines sold made an actual return for their buyers.

Maybe it will lead to some people investing? Yeah, possible!
Goldrush? No way!

Comparing to any gold rush (there were hundreds of them) is a bit far fetched.
First, in bitcoin mining, you have some clear rules, you already know the reward, you already know how much you will mine.
Second, it's far easier to buy and store bitcoins if you're bullish on the price, unlike gold in large quantities, not even talking about wanting to get rid of it in case of an emergency.

Now if we leave the real goldrush scenario and we compare this event to other bubbles, like the real estate, the social networks madness, the now ongoing green energy, and electric cars investments, what it lacks is the volume, which is given by the same block reward that mining companies will get as revenue.

With an air travel company, you can expect with investment to triple the passenger numbers, Saudi Arabia's Aramco can double its production, but, no matter what you do here will be still only new bitcoins mined and the next year only half the number in less than 6 months..


Nope, look at the hashrate last year, a bear market in full pawer, the hashrate was dropping seriously for the first time, nobody was buying anything. If we go again to 3000 with the amount of gear already sold and waiting for ROI we won't see even a batch getting sold.

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.

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.

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.


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.

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.

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.

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.

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.

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.

'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.

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.

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.

Is there any information on the profitability of this activity ?

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. 

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.

 

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 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.

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.

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.

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.

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.

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.

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