Has Bitmain Been Selling off BTC for BCH Prior to IPO?
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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?
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:
#Bitmain is now explaining to all of the potential IPO investors on why they’re all in on #BitcoinCash. This is monster news for $BCH as this is a huge gateway for BIG investors who want to invest in the LARGEST #bitcoin mining company! #Cryptocurrency @BITMAINtech
— CryptoCurrency 🤑 (@crypto_goat_) August 12, 2018
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.
According to the Bitmain pre-IPO investor deck, they sold most of their #Bitcoin for #Bcash. At $900/BCH, they’ve bled half a billion in the last 3 months. If Bitcoin Core devs didn’t disclose the Bcash vulnerability, it could’ve wiped a billion dollars off their balance sheets. pic.twitter.com/9BMywdvvby
— Samson Mow (@Excellion) August 11, 2018
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.
Since they’ve continued to sell into 2018, and net coins have dropped, they’ve sold entire 2018 mined inventory also plus 10k left over coins from 2016-2017. They are pouring on the selling, and have acquired 150k BCH coins. They are blowing themselves up to support bcash.
— Parabolic Trav (@parabolictrav) August 12, 2018
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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