Has Bitmain Been Selling off BTC for BCH Prior to IPO?

Newly publicized documentation relating to Bitmain’s rumored upcoming IPO claims to show the company has sold off a large portion of its Bitcoin (BTC) holdings for Bitcoin Cash (BCH).

Also see: Debate on Crypto Adoption — McAfee, Wareing, Capo, Neil, Painter Spar

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The Chinese mining giant is thought to be considering listing on the Hong Kong Stock Exchange sometime towards the end of 2018 with a valuation of $18 billion USD, putting the company $7 billion ahead of Facebook, which IPO’d at a value of $12 billion in 2012. Bitmain also received $1 billion in pre IPO financing from a number of sources in July.

Pre-IPO Investor Pitch Deck Leaked?

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Bitmain’s investor pitch deck, a reported screenshot of which was shared by Blockstream CSO Samson Mow, shows that at the end of 2017, Bitmain held 36,877 BTC and 841,866 BCH. By midyear 2018, however, Bitmain’s bitcoin holdings had dropped over 33 percent to 22,082 BTC while holdings of BCH increased to over 1 million units, equalling 11 percent of the entire supply.

Interpretation of these figures has already stirred up controversy, with some believing it will herald in a new bull run, especially for BCH:

Others though, like Mow, believe it demonstrates that the failure of the BCH “flippening” play (which was assumed to be spearheaded by Bitmain) makes an IPO necessary.

Mow is not the only industry figure to express this sentiment, with uber-bull @parabolictrav believing it shows the lengths the Chinese company has gone to in order to support BCH.

Still, as a leading proponent and the major hashing power behind BCH, Bitmain cannot be accused of not putting their money where their mouth is. And while an increase in BCH holdings may seem like a bullish sign for the future of the oft-derided cryptocurrency, the widespread denigration — seeing BCH labelled a “Roger/Jihan propaganda coin”, a “scam” or a coin without innovation or a competent development team — has only compounded with BCH being hit particularly hard by the 2018 bear market.

Bitmain provides the lion’s share of security for cryptocurrencies via sales of its miners and operation of its mining pools. This strength has translated to record revenue and has enticed the company to expand into related fields such as artificial intelligence as well as building a mining farm in Texas.

While some interpret Bitmain’s cryptocurrency holdings as signs of a strategic failure, with astronomical profits and continued market dominance, it would logically seem unwise to bet against the billionaires.

Do Bitmain’s rumored moves make good business sense? Let’s hear what you think in the comments section.


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