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Breaking Down the Bitmain IPO

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Breaking Down the Bitmain IPO

As the world of cryptocurrency becomes an increasingly larger part of the global finance economy, we’ll probably start seeing more and more activity on large stock exchanges. In fact, that’s exactly what is happening with crypto company Bitmain. This company is currently preparing for an IPO. Here’s everything you need to know about the upcoming Bitmain IPO.

Bitmain IPO: Who is Bitmain?

Bitmain is a cryptocurrency company based in Hong Kong. The company is primarily focused on crypto mining. In particular, Bitmain makes a variety of mining tools.

But the company doesn’t just make tools for mining. It is also a largescale mining operation. Essentially, Bitmain has covered the full spectrum of mining operations. The company makes tools to carry out mining operations, and it runs its own massive mining operations at the same time.

After a couple big years, the company announced plans for an IPO. Following the Bitmain IPO, the company plans to list on the Hong Kong Exchange.

Bitmain IPO: What We Know

Bitmain is currently a privately owned company. But with the Bitmain IPO on the horizon, the company is rapidly preparing to go public. Much of what we know about the upcoming Bitmain IPO comes from documents that were reportedly leaked.

These documents apparently first showed up on Imgur. They’ve since been circulating around Twitter. After being leaked, the documents were reportedly translated by BitMEX.

BitMEX is the shortened name of the Bitcoin Mercantile Exchange. The exchange is based in the Seychelles and functions as an online Bitcoin exchange. The platform reports somewhere around $5 billion in daily Bitcoin trades. Along with translating the leaked Bitmain documents, BitMEX also provided a detailed analysis.

At this point, the bulk of what the world knows in the days leading up to the Bitmain IPO comes from this leaked document. Here are some of the keys revealed in these documents:

  • Bitmain is heading into its IPO with a valuation in the neighborhood of $14 billion.
  • Currently, Bitmain claims net assets valued at $2.6 billion.
  • $1.2 billion of these assets are labeled “inventory.” Basically, that is going to be all of Bitmain’s mining tools that have not yet been sold.
  • Sales of Bitmain’s mining tools have dropped recently. During the first quarter of 2018, sales dropped by roughly $500 million.
  • Bitmain reportedly used 67 percent of its 2017 cash flow to purchase tons of Bitcoin Cash.
  • Bitmain now holds more than $555 million in Bitcoin Cash. The company reportedly holds around six percent of all Bitcoin Cash now in existence.
  • Bitmain holds a number of other cryptocurrencies as well. The company’s total holdings are reportedly worth $823 million. That’s down from $1.7 billion earlier this year.

What It All Means

The leaked documents reveal a number of interesting trends. For starters, the company has shown drops and losses in a few different areas. At first glimpse, it could be easy to assume the worst.

But these drops could also simply be the result of Bitmain’s attempts to shift its focus and build a strong base for its IPO. The best example of this is its focus on Bitcoin Cash. As Bitcoin Cash has recently shown some losses in value, it has negatively affected Bitmain’s numbers. But this is likely to change moving forward.

Similarly, Bitmain has a lot of its value wrapped up in “inventory.” This could be alarming to some. That’s particularly true if you see this as a sign that the company is stockpiling products too much. But it could also be a sign that the company is looking forward and preparing for the future.

So what’s the takeaway? At the end of the day, the losses revealed in the leaked documents shouldn’t be as alarming as they might seem. With that said, many experts are predicting the Bitmain IPO to go well. In particular, going public early relative to other crypto companies should carve out a competitive footing for Bitmain.

At the same time, many experts point to the need for Bitmain to step up its resource management efforts. One of the big question marks is how well the company will use the influx of capital it should raise by going public.