Just six months ago, Bitcoin and its long list of cryptocurrency cousins were mostly claimed dead after their dollar value plunged more than 80 percent within a year. But who would have thought a textbook economic bubble like this could make a comeback?
Since hitting rock bottom last December, Bitcoin’s price has skyrocketed more than three times, hitting a one-year high above $9,700 on Friday morning. And the revival is getting some of the key players in the crypto space to consider expansion into the public market.
For example, Bitmain, the world’s largest maker of Bitcoin mining chips, could file an IPO in the U.S. as soon as next month, Bloomberg reported on Friday.
The Beijing-based firm was valued at $15 billion during its last private funding round and at one point sought to raise another $3 billion through a public listing in Hong Kong.
But its Hong Kong listing application stalled in March—while Bitcoin’s price was at a one-year low—as local regulators considered cryptocurrency companies to be premature for the public market.
Two of Bitmain’s rival companies in China, Canaan Creative and Ebang International Holdings, also let their Hong Kong IPO applications lapse recently. Hong Kong’s stock exchange and market regulator had many questions about these companies’ business models and prospects, Reuters reported in December of last year.
Now, in its planned U.S. listing, Bitmain is seeking to raise a smaller amount—between $300 million and $500 million—people familiar with the matter said, as company leaders still have some lingering worries about high volatility in cryptocurrency prices.
Canaan is also mulling a U.S. IPO after its failed attempt in Hong Kong, Bloomberg reported.
Companies like Bitmain and Canaan design and produce high-speed computing chips known as application-specific integrated circuits (ASICs). These chips are required by cryptocurrency miners to perform heavy-load computing when verifying transactions on blockchain—a process known as “mining.”
Because miners receive a small fraction of Bitcoin as a reward after verifying a transaction, their incentive to “mine” is highly dependent on the market value of Bitcoin. When the digital currency’s dollar value plunged below $3,200 last December, a large number of miners chose to quit the effort because the reward could not even offset the cost of mining, such as the expenses of chips and electricity.