Most famously known for their cryptocurrency mining ASIC chips, Bitfury is reportedly interested in public on a major stock exchange in 2019, reported Bloomberg on October 25, 2018.
The mining company has had talks with global investment banks with countries all through Europe in preparation for a trading debut in Amsterdam, London or Hong Kong.
Pre-IPO Valuation of $5 Billion
Typically, only three methods to raise additional capital exist in the market: debt, equity, or a hybrid of the two. Debt financing involves issuing bills, bonds, notes or some kind of investment vehicle. Investors that purchase these will have principal repaid on top of interest at a later date.
Equity involves selling ownership of the company and allows investors to profit from future earnings either in the form of appreciated stock prices, dividends, or both.
Bitcoin mining has been attributed sometimes to gold mining in that while some miners struck it rich if they got in early, most of the money was made from those selling the shovels. As Bitcoin and cryptocurrency mining gets more widespread, the potential for Bitfury to achieve higher sales figures becomes more likely.
Equity is by far the more interesting of the two because the barrier for entry is far lower. With debt financing, typically only accredited investors with deep pockets will be participating, but if Bitfury were to offer stocks by going public on a stock market, anyone could invest in the company.
With Bitfury reporting a revenue of $450 Million in the past year leading up to March 2018, the company could be a very profitable addition to anybody’s stock portfolio.
If Bitfury were to take their company public within the next two years, valuation estimates are already in the $3 billion – $5 billion range. These numbers are given in a cryptocurrency bear market and coupled with how fast the sector develops; we could see valuation numbers far higher as we approach 2019 and 2020.
Potential Concerns
While this development, for the most part, can be considered positive news for the company, there are concerns that need to be taken into consideration.
If the company goes public, Bitfury will be under scrutiny for the first time. While this alone shouldn’t be a problem, sometimes interesting things can be discovered about a once private company that suddenly goes public.
Another is a potential conflict of interests between what’s good for Bitcoin and the network and satisfying shareholders. Again, both are possible scenarios of an unconfirmed IPO, but still worth considering.
