It is no secret that since Bitcoin’s peak in value the cryptocurrency has been steadily declining. In 2017, it rose 1,400% during a surge in investments into digital assets, but since then, it has dropped almost 70%. Researchers claim that the soaring value that Bitcoin once had was purely down to manipulation according to scientists at the University of Texas.
It might be time for some people to legitimise the currency sooner, and this week, Crunchbase reported that Jihan Wu’s Bitmain raised $400 million in a late-stage funding round. This is a pre-IPO deal that was first announced by Deal Street Asia, which referenced unnamed employees at Bitmain. CCN later picked up the story, but nothing has been confirmed by the company itself as of yet.
It comes after the company’s CEO, Jihan Wu, revealed he is open to an overseas IPO on June 7th in a report from Bloomberg. The news also comes in the wake of the world’s largest crypto-mining operation’s main competitor, Canaan, publicly disclosing it has the objective of launching an IPO. Bitmain’s news was brought to light when Wu was interviewed in Hong Kong.
The Coin Telegraph reported Bitmain’s share of the bitcoin mining-chip market is 75%, holding, by far, the largest market share in the world. The company will be an attractive investment to many looking to get into the business. However, Kevin Wang, an analyst at Mizuho Securities Asia, added in an interview with Bloomberg, “They’ll have a premium for their valuation because there are very few [other options], but the sustainability of the business is the question mark”.
Bitmain was only founded in 2013, but the company has already brought in revenue of $2.5 billion last year and has been given a private valuation of $12 billion, although Bloomberg notes it’s closer to $9 billion. Wu is aware of how important his company’s relationship with regulating authorities will be, considering that the People’s Republic of China announced that it would be tightening restrictions on “all cryptocurrency trading with a ban on foreign exchanges”.
In March, Wu also spoke of his desire to invest in Blockchain-powered private central banks. He shared this at the DC Blockchain summit, which was hosted by Perianne Boring’s Chamber of Digital Commerce. To help this become a possibility, the CEO said he would be investing in 20 to 30 start-ups that would help to make it a reality. It has been a busy few months for Wu, who aims to maintain his advantage over his competitors in a market where faster scalability will be the key to success.