China's largest mining company Bitmain Technologies is seeking to raise $1 billion in a private pre-IPO funding round, according to a Financial Times report on Wednesday.
The search for funding is due to the fact that the company operates in completely different realities than even a month ago. The sharp decline in the price of Bitcoin reduced demand for Bitmain's mining devices, so the company was forced to reduce prices on its line of products. However, according to the Financial Times, Bitmain still mines more than half of the world's Bitcoin supply.
Along with rumors of a private funding round, Bitmain is also planning a public IPO, which is estimated to raise between $30 billion and $40 billion over three years. The document stated that the current IPO valuation is $14 billion.
Bitmain is not the only major manufacturer of miners in the world, and soon it may cease to be such in its own country. Canaan Creative, the second-largest company in the market with a 20% stake in the industry, has applied for a permit to operate in Hong Kong.
How quickly do Bitcoin mining hardware prices drop? According to the Financial Times, those miners that were selling for 30,000-40,000 Chinese yuan now cost no more than 4,000. According to Nvidia representatives, last month they sold $18 million worth of cryptocurrency chips and similar goods, although they expected to receive at least $100.
Bitmain is directly exposed to fluctuations in the Bitcoin market, as it holds approximately $1.2 billion in digital currency.
According to Finance Times, Bitmain's funding depends on the volatility of digital currencies. Unnamed investors involved in the project believe that product pricing and distribution are also linked to this volatility.
According to pymnts.com
You May Also Like
Crypto farms are being hunted down and closed down in Malaysia. What problems does mining pose for the country's power grid?
In Malaysia, due to excessive load on local power grids, the country's authorities began to look for crypto farms that illegally connect to power. The police, together with the local energy company TNB, conduct special raids during which they detain miners and destroy equipment.
Hashflare abandoned Bitcoin mining due to low profitability
Hashflare is a cloud cryptocurrency mining service. This system manages a set amount of computing power on a user's computer and rewards them with a share of the transaction they help facilitate.
