Bitmain Technologies plans for $1Billion fundraising, despite Bitcoin volatility

Bitmain Technologies plans for $1Billion fundraising, despite Bitcoin volatility 22371
News
Aakash Athawasya
Sep 5, 2018 at 9:45 AM

Bitmain Technologies, the premier bitcoin miner and the designer of the ASIC chips, is looking towards an Initial Public Offering (IPO) with an aim of $1 billion in their pre-IPO, having completed the registration for the same in August 2018, this despite the falling value of the Bitcoin massively affecting their demand.

Responsible for mining over half the world’s bitcoins, Bitmain Technologies based in Beijing hopes to bring in an amount of $30billion - $40 billion within a period of three years. Now valued at around $14 billion, with revenues of $2.5 billion in 2017 and net profits of just over $1 billion. Mining has no doubt, been the main revenue agent for Bitmain, with $1.86 billion coming from the mining of bitcoins.

The turn of the year has had a negative effect on their profit margin, with the value of Bitcoin falling from its December 2017 high of $20,000, currently priced at $7,374 and a market capitalization of $127.20 billion according to CoinMarketCap.

Mining bitcoins requires a high degree of computational knowledge, the ability to solve mathematical problems quickly and a powerful computer that can handle the workload. The slump in the prices of the Bitcoins has affected the mining kits as well, merchants said the kits were selling, last December, for Rmb30,000- Rmb40,000 ($4390-$5850) and now the price has declined to Rmb3,000-Rmb4,000, a drastic fall.

China’s mining industry is not the only affected market, with the US seeing mining slumps. Nvidia, the US technology company, stated that the sales from their products related to cryptocurrency in the second quarter were less than one-fifth of the estimated $100 million. Colette Kress, Chief Financial Officer for the company said, “We are now projecting no contributions going forward.”

This kind of volatility is expected when operating in such a tumultuous market around such a fluctuating product and Bitmain, funded by the likes of IDG Capital and Sequoia, is no stranger to these ups and downs.

Bitmain owned cryptocurrency worth $1.2 billion, as of March 2018.

See also: Bitmain to become “legendary” by improving its skill management: BitMEX report

See also: Is Bitcoin miner Bitmain losing its competitive advantage? – Report suggests

Image via Shutterstock

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