Canaan Reportedly Beats Bitmain to First US Bitcoin Mining IPO

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Bitcoin mining giant Canaan creative has reportedly beat fellow Chinese crypto mining hardware manufacturer Bitmain Technologies to the punch by filing for an initial public offering (IPO) in the U.S.

Canaan will be hoping to follow through on its plans at the second time of asking after allowing a similar filing with the Hong Kong Stock Exchange (HKEX) in 2018 to elapse. The news comes at a time when there seems to be an increasing level of appreciation for the magnitude of the industry in the country.

Canaan Ditches Hong Kong for the US

Reports on Chinese social media platforms say Canaan has filed a $200 million IPO in the U.S. According to the reports, the Chinese crypto mining hardware manufacturer has submitted filing documents with the U.S. Securities and Exchange Commission (SEC).

The choice of the U.S. as the new IPO location comes after its previous attempt at the HKEX failed to sail through. Regulators at the HKEX reportedly weren’t satisfied with the information contained in Canaan’s filing and the company elected to allow its application to expire.

Canaan, manufacturers of the Avalon mining rig series will face even greater scrutiny from the SEC. The Commission has a track record of demanding robust compliance from crypto businesses as seen in the many Bitcoin ETF rejections.

The bitcoin mining behemoth will be hoping to take advantage of the 2017 SEC rule change that allows companies regardless of their size to seek private IPO applications. Canaan’s filings will take about three or four months to review before approval will be given for the IPO.

The Bitcoin Mining IPO ‘Holy Grail’

As previously reported by Blockonomi, Bitmain has also expressed its intention of pursuing another IPO in the U.S. as well. Like Canaan, the Chinese bitcoin mining giant filed for a public offering with the HKEX which resulted in a similar outcome.

Bitmain’s new IPO target is, however, materially lower than the $3 billion attempt that made headlines in 2018. Reports indicate that the 2019 IPO is looking to raise between $300 million and $500 million.

There are even reports that Bitmain is also eyeing an IPO filing in Shanghai. The company plans to take advantage of the Science and Technology (Sci-Tech) division of the Shanghai Stock Exchange to get a favorable ruling.

Back in 2018, bitcoin mining firms were actively pursuing IPOs and for the first half of the year, appeared to be a tangible dream. However, with the bear market not abating, the second half of 2018 proved to be brutal for mining firms that had somehow managed to protect themselves while the rest of the market was already in turmoil.

Bitmain suffered heavily in 2018, incurring losses running into hundreds of millions of dollars in Q3 alone. The company also had to abandon plans to open a massive mining facility in Texas while laying off entire departments.

Bull Market Reigniting Mining Profitability

In the latter part of 2018, the prolonged bear market caused fears of a bitcoin mining death spiral. The network hash rate even plummeted as mining nodes went offline.

However, there has been a trend reversal in 2019 with the hash rate reaching new highs making the Bitcoin blockchain to be at its most secure level in history. There is now more mining activity on the network with even Bitmain making plans for further expansion in China.

The hash rate decline of 2018 did help to make the market a lot more decentralized. By mid-2018, Bitmain-owned mining pools controlled close to 51% of the network’s hash rate leading to fears of mining centralization.

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