Despite sinking cryptocurrency prices across the board, cryptocurrency mining top-dog Bitmain claims huge profits and affirms its plans to go public.
Chinese cryptocurrency mining titan Bitmain released its first official financial report this week.
If you anticipated that Bitmain’s profits most likely reflect the current declining climate of the cryptocurrency market, you would be surprisingly mistaken.
The company posted profits of nearly three-quarters of a billion dollars for the first half of 2018 — a staggering increase of over 900 percent from the profits made in the last half of 2017.
Bitmain’s subsidiary companies Antpool and BTC.com own the largest percentage of mining power in the Bitcoin mining pool and also hold a large percentage of mining power for Bitcoin Cash and other major cryptocurrencies.
Getting High Marks
Bitmain has quite a strategic business plan in play. It covers all the bases, so to speak.
The company is able to take advantage of multiple revenue streams by manufacturing top-of-the-line ASIC mining rigs for Bitcoin, Bitcoin Cash, Ethereum, and eight other cryptocurrencies. It then uses the mining rigs to mine cryptocurrencies for itself and sells the remaining units to the public.
Bitmain also has a large division for the research and development of products using artificial intelligence and high-capacity data storage.
The next big steps for Bitmain is to launch an Initial Public Offering (IPO) and get listed in Hong Kong.
In Bitmain’s financial report, the company states:
The application to which this document relates has not been approved for listing and the Exchange and the Commission may accept, return, or reject the application for the subject public offering and/or listing.
An IPO would also help Bitmain alleviate a bit of pressure to sell a portion of their digital assets to fund further projects.
The price of Bitcoin Cash (BCH) has reacted to Bitmain’s news.
The Market is Watching
In an article from CNBC , Brian Kelly, founder and CEO of BKCM, was quoted as saying:
Clearly by the numbers, they’re quite profitable. If Bitmain wasn’t making money, some speculated that it would have to sell its holdings to fund operations and that would put pressure on already weak crypto prices.
This is a very real threat indeed.
Bitmain has a very large presence in the cryptocurrency markets and their success is openly used by some as an indicator that the markets will soon recover. Conversely, if Bitmain were to sell large pieces of its cryptocurrency holdings, the public could see the potential for a further downturn and potential wave of panic selling.
Do you think The Hong Kong Exchange Commission will accept Bitmain’s proposal for a public offering and listing? Let us know your thoughts in the comments below!
Images courtesy of Shutterstock, CoinMarketCap.
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