The long-anticipated and once-disputed IPO of Bitmain has finally moved forward. On September 26, the company formally submitted its listing application to the Hong Kong Stock Exchange (HKEX), putting an end to earlier rumors of a canceled offering.
Industry experts estimate that Bitmain could achieve a valuation of up to $50 billion. If the process proceeds as planned, Bitmain will become the first major blockchain company to go public via an initial public offering (IPO). It will also follow in the footsteps of Xiaomi and Meituan as the third company with a weighted voting rights structure to list on HKEX.
The Dominance of Bitmain in Crypto Mining
The story of Bitcoin mining began in January 2009, when the pseudonymous creator Satoshi Nakamoto mined the genesis block and received the first 50 bitcoins. This event marked the beginning of what would become a global digital gold rush.
Mining, in simple terms, refers to the process of using computational power to produce new bitcoins. The more mining equipment one operates—and the more powerful that equipment is—the greater the share of new bitcoins one can earn.
Founded in October 2013 by Micree Zhan and Jihan Wu, Bitmain quickly established itself as a leading producer of cryptocurrency mining hardware. The company released its first ASIC miner, the Antminer S1, followed by more advanced models incorporating cutting-edge chip designs.
By 2016, Bitmain had introduced the 16nm BM1387 chip, setting a new industry standard that older chip manufacturers struggled to match. Over the next five years, Bitmain gradually outpaced nearly all its competitors, capturing approximately 80% of the global market for cryptocurrency mining machines.
According to its prospectus, Bitmain has now surpassed Spreadtrum Communications, a 17-year-old Chinese semiconductor company, to become the second-largest IC design company in China.
The November 2015 launch of the Antminer S7 is widely regarded as a turning point in the history of Bitcoin mining. From that moment on, Bitmain solidified its position at the top of the industry.
Today, Bitmain’s "Antminer" brand holds between 70% and 80% of the global market share for Bitcoin ASIC miners. Beyond manufacturing, Bitmain is also deeply involved in mining operations, directly or indirectly controlling more than half of the total computational power on the Bitcoin network.
Some industry observers argue that Bitmain’s dominance in both hardware and mining operations makes it an influential player in the cryptocurrency market—one capable of affecting prices due to its substantial bitcoin holdings.
In August 2017, Bitmain’ mining pool ViaBTC initiated the hard fork that led to the creation of Bitcoin Cash (BCH), further extending the company's influence in the crypto ecosystem.
Notably, all three of China’s major mining hardware manufacturers have now initiated IPO plans. In addition to Bitmain, both Canaan Creative and Ebang International have filed applications to list on the Hong Kong Stock Exchange.
Exceptional Financial Performance
Bitmain’s prospectus reveals staggering financial growth over the past three years. The company’s revenue increased from $137 million in 2015 to $2.517 billion in 2017, representing a compound annual growth rate of 328.2%. Net profit also soared, rising from $83 million in the first half of 2017 to $743 million in the first half of 2018—an increase of nearly 800%.
The core of Bitmain’s business is designing application-specific integrated circuits (ASICs) used in cryptocurrency mining and artificial intelligence. The company is now ranked among the top ten fabless chip designers globally.
Miners sales remain Bitmain’s primary revenue source. In 2016, the company sold 260,000 Antminers; by 2017, that number had jumped to 1.62 million, of which 1.1 million were used for mining Bitcoin or Bitcoin Cash. The average selling price per unit also rose significantly, reaching $1,333 in 2017.
Bitmain’s customer base has expanded rapidly, growing from 6,000 in 2015 to more than 46,000 in 2017. By the first half of 2018, the number of customers exceeded 80,000.
In 2017, miner sales accounted for almost 90% of total revenue. In the first half of 2018, revenue from hardware sales reached $2.684 billion, making up nearly 95% of all revenue. More than half of that income came from overseas markets.
Beyond hardware, Bitmain also operates mining farms and offers hosting services, allowing customers to contribute hashing power to mining pools and share in the rewards.
As of June 30, 2018, Bitmain had established 11 mining farms across China—mainly in Sichuan, Xinjiang, and Inner Mongolia—with a combined capacity of approximately 200,000 miners.
The company also operates two of the world’s largest Bitcoin mining pools—BTC.com and Antpool—which together account for a dominant share of the global hashing power.
Leveraging its strong R&D capabilities, Bitmain has also expanded into artificial intelligence. In 2018, it launched its second-generation AI chip, the BM1682, and began collaborating with leading AI firms to explore new business opportunities.
Many in the industry see crypto mining as one of the most reliable business models within the blockchain ecosystem. As one miner put it: “During a bull market, you can recoup your investment in less than a year—sometimes even six months. If you have enough capital, you can set up a whole mining farm and literally make money while you sleep.”
Even during the crypto market downturn of early 2018, when Bitcoin’s price fell sharply and smaller mining operations struggled, Bitmain continued to report impressive profits.
Strong Backing and Market Confidence
According to the prospectus, Bitmain’s two main founders are Micree Zhan and Jihan Wu. Zhan holds 36% of the company, making him the largest shareholder, while Wu owns 20.25%. Four other co-founders hold smaller stakes.
Over the past two years, Bitmain has completed three rounds of financing, attracting investments from several well-known venture capital and private equity firms. Sequoia Capital, for instance, holds about 3.14% of the company, while Sinovation Ventures—founded by Kai-Fu Lee—holds 1.13%. Singapore’s sovereign wealth fund, Temasek, is also among the investors.
Bitmain uses a dual-class share structure, which gives Class B shares ten times the voting power of Class A shares. This ensures that the founding team retains control over major decisions.
In a notable move, Liu Luyao, a former deputy general manager of investment banking at CICC, joined Bitmain as CFO in July 2018. CICC is also serving as the sole sponsor of Bitmain’s IPO.
The company’s board of directors includes three independent non-executive directors with impressive credentials: Wang Xiaochuan (founder of Sogou), Sun Hanhui (former president of Qunar), and Deng Feng (founder of Northern Light Venture Capital). Each chairs a key committee within the board.
There has been much speculation about why major mining firms are rushing to go public. Some analysts believe that the prolonged bear market in cryptocurrencies has reduced demand for mining hardware, prompting companies like Bitmain to seize the window of opportunity while they can.
Earlier reports had raised concerns that Bitmain’s large holdings of Bitcoin Cash (BCH) could pose a risk given the high volatility of crypto markets.
However, from another perspective, Bitmain’s IPO could allow traditional equity investors to gain exposure to cryptocurrency assets without directly holding them. If Bitmain lists successfully, its stock could function similarly to an exchange-traded fund (ETF) for Bitcoin Cash.
Since Bitmain holds a significant amount of BCH—acquired through mining and hardware sales—even if its miner business is valued separately, its BCH holdings alone may represent substantial value.
In this sense, Bitmain’s stock may be seen as a proxy investment in BCH. If listed, institutional and retail investors could indirectly gain exposure to BCH by buying shares in Bitmain, potentially supporting the value of the cryptocurrency.
All in all, Bitmain’s submission of its IPO application is seen by many as a vote of confidence—one that could inject renewed optimism into the digital currency market during a period of uncertainty.
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Frequently Asked Questions
What does Bitmain do?
Bitmain is a leading manufacturer of cryptocurrency mining hardware. It also operates mining pools and has expanded into artificial intelligence chip design. The company is best known for its Antminer series of ASIC miners.
Why is Bitmain going public?
Bitmain aims to become the first major blockchain company to list via an IPO. Going public could provide the company with additional capital, enhance its brand credibility, and allow investors to gain exposure to the growing crypto mining industry.
How has Bitmain performed financially?
Bitmain has shown remarkable growth. Its revenue grew from $137 million in 2015 to over $2.5 billion in 2017. Net profit increased nearly eightfold from the first half of 2017 to the first half of 2018.
What is Bitcoin Cash, and how is Bitmain involved?
Bitcoin Cash is a cryptocurrency that resulted from a hard fork of Bitcoin in 2017. Bitmain’s mining pool, ViaBTC, played a key role in the fork. The company also holds a significant amount of BCH.
How does Bitmain’s IPO affect the crypto market?
A successful IPO could boost market confidence by legitimizing crypto mining as an industry. It may also allow traditional investors to indirectly invest in cryptocurrencies through Bitmain’s stock.
What are the risks associated with investing in Bitmain?
Like all crypto-related businesses, Bitmain is exposed to market volatility, regulatory changes, and technological shifts. Its large holdings of Bitcoin Cash also pose a potential risk if the value of BCH declines.