Seize the bitcoin skyrocketing market, the IPO of miners’ giants must “resurrect and die”

Investing.com – Bitcoin reappears in the 2017 skyrocketing scenario. According to the British financial data, on June 21, Bitcoin ( BinfinexUSD ) broke through the $10,000 mark by Facebook's disclosure of the currency plan ; now it has stood at $12,000. The bulls even began shouting to rise back to $20,000.

Along with the territorial counterattack of Bitcoin, the miners who once hit the wall at the Hong Kong Stock Exchange also began to "make up."
“marketing adaptability”
On June 21, Bloomberg quoted sources as saying that Bitmain, the world's largest miner, will submit its listing documents to the US Securities and Exchange Commission (SEC) as early as July; four days later, Reuters reported another miner. Bang International is also considering going public in the US. In January of the beginning of the year, Bloomberg reported that Jia Nan Zhi Zhi also had the same plan.

The three major mining giants submitted their prospectus to the Hong Kong Stock Exchange in September, June and May last year, and they are now in a state of lapse. Among them, Yibang International was also arrested by the Hong Kong Stock Exchange for being involved in the 520 million illegal fund-raising case; it was resubmitted in December last year. But the HKEx obviously does not want to be the first person to eat crabs.

The concerns of the HKEx are easy to understand.

At the Davos Forum in January this year, Li Xiaojia, president of the Hong Kong Stock Exchange, told reporters the principle of listing approval in Hong Kong - "marketing adaptability", including the sustainability of operations and compliance with regulatory requirements. Although there is no name for the three major mining companies, it is obviously their weakness.

According to the prospectus disclosed by Bitland last year, its revenue is divided into mining machine sales, mining pool operations, mine services, self-operated mining and others. Among them, mining machine sales are core businesses, and its contribution to revenue is 78.6% from 2015. It climbed to 94.3% in the first half of 2018.

Similarly, the proportion of total revenue of the blockchain business including the mining business has increased from 31.7% in 2015 to 94.6% in 2017. In the first half of 2018, blockchain business revenue has accounted for 99.3% of Yibang International's total revenue.
2018 "mine disaster"
Mining is a strong cycle industry and has a very high correlation with bitcoin prices. In 2018, bitcoin prices continued to fall. For miners, profits plummeted and even unprofitable. The industry ushered in “mine disasters” and mining machines closed. This directly affects the upstream mining machine producers.

In December last year, Jia Nan’s director of science and technology Chen Feng admitted that the sales of mining machines in the second half of the year were not as high as half a year. The mining machine sales platform of the mining machine also said that the sales at the end of last year were less than one tenth of the 2017 peak. Negative news such as clearing stocks, layoffs, and reducing business scales have been reported. According to media reports, at the beginning of the year, Bitt China had just completed a round of large-scale layoffs. The proportion of layoffs in mining operations exceeded 30%, and the proportion of layoffs in the AI ​​business sector reached 50%.

This is also directly reflected in the financial report. In the prospectus resubmitted in December, Yibang International mentioned in the “significant adverse changes” that the monthly average order of mining machines showed a “significant decline” in the third quarter, causing the revenue and gross profit to plummet, but did not disclose the specifics. data.

In February of this year, according to Coindesk, Bitcoin updated its financial statements, showing that revenue in the third quarter of last year was only $200 million, with a loss of about $500 million. In the first half of last year, its revenue exceeded $2.8 billion and its gross profit was about $1 billion.

For Bitcoin, the source of instability is in addition to the sale of the miner, as well as the cryptocurrency itself it holds. According to the prospectus, in the first half of last year, its cryptocurrency, such as bitcoin, bitcoin cash, Ethereum, and Litecoin, had a net loss of $102.7 million.

Where is the way out?
Although the mining giant's revenue and profits have grown exponentially before 2017, the huge speculative risks are also prohibitive. Bitcoin has always been known for its big ups and downs. According to the position report of the US Commodity Futures Trading Commission, as of the 18th, the speculative positions of Bitcoin futures have increased substantially, which means investors need to be wary of speculative risks and current price increases. It is likely to be difficult to sustain.

Therefore, even if the three giants successfully listed in the US, they must face the torture of investors. Bitcoin has previously tried to convince the HKEx for a reason: its business model is not only cryptocurrency mining, but also to invest in more advanced chip technology, and develop routes such as artificial intelligence, telecommunications and blockchain R&D.

But from the distribution of income, this rhetoric is not convincing. Perhaps, as Li Xiaojia said, "You used to make billions of dollars through the A business, but suddenly said that you want to do B business in the future, but there is no performance. Then I think that the A business model that you brought to the market is There is no continuity. Then you can still do this business, can you make this money?"