Bitmain | The Giant, The Truth and The Pitfalls

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There has been a lot of Fear, Uncertainty and Doubt (FUD) surrounding Bitmain following the announcement from the Bitmain team to seek an IPO. Calls denigrating this behemoth can sound incredibly accurate, especially when other giants in this space participates. But is there any truth in the matter?

Bitmain was founded back in 2013, when the cryptocurrency and mining communities were still incredibly nascent. They have since built a massive empire mainly based off designing and selling Application Specific Integrated Circuit (ASIC) miners. They hold a strong advantage in ASIC miner production on an unparalleled scale in the market, commands a large market share and obtains increasing year-on-year revenues. Question is, can it maintain its exceptional performance and retain its dominance?

Its cash flow can be considered to be significantly wanting, and their portfolio is susceptible to large variations from low liquidity due to majority of the holdings being in the relatively less liquid Bitcoin Cash. Bitmain’s failure to gain more political clout in the BTC ecosystem, insufficient action taken against credible entrants and rising threats, as well as the lack of new technological breakthroughs in their outdated ASIC miners are factors which further fuels the question.

Companies seek an IPO mainly to raise more funds and/or for early investors to exit. Which of those is the case with Bitmain? And would a successful IPO be beneficial for Bitmain? More importantly, what are its potential implications for the broader cryptocurrency market as a whole?

Herein lies a full analysis of the IPO, and as a result, a dissection of the present state of Bitmain and its future position in the cryptocurrency ecosystem. This paper aims to present all information available currently in an unbiased and accurate manner as much as possible, and is meant to be a not-for-profit, independent and educational piece.