On Monday, Bloomberg reported that Bitmain’s 32-year-old CEO is considering taking his company public.
Bitmain is the world’s largest producer of cryptocurrency mining chips, and analysts conclude that the company may control as much as 80% of the ASIC mining equipment market. Estimates surrounding the company’s worth have varied by several billion dollars, with Bitmain’s CEO estimating the value at $12 billion, while others have estimated the company is worth closer to $8 billion.
Jihan Wu, Bitmain’s billionaire CEO, said in an interview that they may take steps to initiate an initial public offering (IPO). An IPO would allow individuals to invest in Bitmain with ease, and therefore invest directly in the cryptocurrency mining industry. Bitmain’s founders and stakeholders would also gain a significant amount of liquidity, which would allow them more direct access to their wealth. It would also give Bitmain’s early investors, including Sequoia Capital and IDG Capital, the chance to cash out.
Bitmain’s business is thriving regardless of the slump in the cryptocurrency markets. This is, in part, due to their expansion into other markets including the artificial intelligence industry in China. The purpose of Bitmain’s expansion into other markets serves more purposes than simply hedging against volatility in the cryptocurrency markets. China’s government has not expressed their explicit approval of the cryptocurrency mining industry, but they have explicitly approved the artificial intelligence industry. If there were ever a ban on the production, export, or sale of mining hardware in China, Bitmain’s business would suffer greatly. Recently, Vietnam’s government proposed an import ban on cryptocurrency mining hardware, highlighting the power governments have to inhibit industries.
At this time, details surrounding where Bitmain will be listed remain vague, but Wu did mention that he would consider a Hong Kong listing or an overseas listing with U.S. dollar-denominated shares. Either way, an IPO would advance public knowledge of Bitmain’s various projects and add additional financial support to their artificial intelligence ambitions.
Bitmain’s largest competitor, Canaan Inc., recently filed for a Hong Kong IPO that could raise over $1 billion in capital. Canaan has a significantly lower market share in the mining equipment industry, controlling only about 15-20% of it.