Bitmain & Canaan IPOs: The New Bitcoin Mining Gold Rush
Bitmain Technologies and Canaan Creative — two of the major Bitcoin mining firms are not prepared to give up hope of successfully navigating an IPO listing, this time in the US. With the top-ranked crypto experiencing significant gains in 2019, both mining behemoths have resurrected their IPO plans.
However, previous failed attempts and the need for some success at the planned IPOs have seen earning expectations diminish materially. While Canaan may seem to have a clear path to its IPO, Bitmain’s appears lined with issues stemming from an ongoing leadership tussle.
More Crypto Wild West Symbolisms
Bitmain and Canaan’s tussle to be the first to have a successful U.S. IPO brings up even more “bitcoin is digital gold” symbolisms. It appears the crypto space is poised for its gold rush akin to the 1860s in the old American West (“Wild West”).
As previously reported by Blockonomi, Canaan is looking to list its U.S. IPO on the Nasdaq after a couple of failed attempts in 2018. Reports also suggest that Canaan’s rival, Bitmain is looking to do the same.
Like any gold rush, there are bound to be winners and losers and the next few months could provide a clue as to how both companies may fare. Listing on a U.S. stock exchange will mean submitting to strict financial reporting standards which will shed a light on the financial health of both companies.
Bitcoin Mining Giants Desperate for US IPO
According to an op-ed on Reuters, there appears to be a sense of desperation for both firms to successfully conclude their IPOs in the U.S. Canaan for its part tried to use a reverse merger and an IPO listing with the Hong Kong Stock Exchange (HKEX) with both attempts failing.
Part of the desperation stems from the fact that bitcoin like the rest of the crypto market experienced a year-long bear market in 2018. The entire crypto space saw token prices plummet by an average of more than 80% across the board.
However, 2019 has seen a significant price recovery for bitcoin at least. The top-ranked crypto is up more than 150% since the start of the year. With this price growth in mind, Bitcoin mining companies have looked to ensure a return to profitable activities after suffering massive losses in 2018.
On the whole, Bitmain and Canaan are survivors of a market shakeout that saw some significant players exit the market. These departures cut across players in the hardware manufacturing and cloud mining scene.
According to Reuters, it seems Canaan is expecting a better performance in the ongoing second half of 2019. The company has reportedly upped its payments to TSMC — the Taiwan-based firm that supplies the chips for its Avalon Bitcoin mining rig.
Bitmain Leadership Imbroglio May Scupper Listing Plans
Bitmain’s road to a successful U.S. IPO isn’t without its share of hurdles as the company is currently in the midst of a messy leadership tussle. Co-founder Jihan Wu suddenly returned to the fold announcing the ousting of fellow founding partner Micree Zhan. In response, Zhan penned an open letter accusing certain individuals of betrayal, vowing to take legal action against a faction of the company.
Some commentators say the initial move to oust Zhan may have occurred without the knowledge and approval of shareholders. The situation presents yet another point of controversy for the company.
Bitmain endured a rough 2018 as massive losses led to a significant downsizing of the company’s workforce. The mining giant also put several high-profile projects on hold citing administrative restructuring.
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