Bitmain Founder Jihan Wu debating IPO

mcminer | June 7, 2018 | 0 | Latest News

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Bitmain, the world’s largest ASIC cryptocurreny mining manufacturer is debating an Initial Public Offering (IPO) according to an interview with founder Jihan Wu by Bloomberg. 

Jihan Wu is one of the founders of Bitmain along with co-founder Micree Zhan, both of whom have a combined share of about 60% of Bitmain with Zhan making up a larger portion. In a recent interview with Bloomberg News, it was suggested that an IPO could be on the cards for Bitmain which would give early investors Sequoia Capital and IDG Capital a chance to cash out early.

Last year Bitmain had over $2.5 billion in revenue and the company has a valuation of about $8-12 billion. Bitmain is to Cryptocurreny as Google is to Search with over 75% market share in ASIC miners. Bitmain also runs the largest Bitcoin mining pools, btc.com and AntPool which account for over 40% of the worlds Bitcoin mining computing power.

antminer-s9-bitmain
Bitmain antminer s9 ASIC

This year alone Bitmain has launched a number of additional miners for other altcoins such as Ethereum, Monero and Zcash. These new ASIC miners for Altcoins have made it difficult for traditional miners to compete with the power consumption to hashrate ratios in which Bitmain ASICs excel. As a result its completely plausible that the sale of Nvidia & AMD graphics cards will decline as ASICs become more powerful and affordable.

Bitmain’s largest direct competitor Canaan Creative only account for 15% market share of ASIC manufacturing has already filed for IPO in Hong Kong and could expect to raise up to $1 billion. Bitmain’s revenue in 2017 was over 12 times that of Canaan’s.

There are a number of challenges that Bitmain will face in sight of an IPO. Cryptocurrency prices have been greatly reduced this year since price highs end of Q4 2017, reducing profitability for miners, making the market less attractive to miners. Bitmain is pushing its other initiatives including AI however the real question is how sustainable will Bitmain be for a more long term business as the number of Bitcoins every nears it 21 million hard cap.

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