Bitfury is evaluating an initial public offering (IPO) as a financing option, with the potential to become Europe’s first crypto-related project to secure funding in this way. The move resembles the decision of Bitmain to seek a stock exchange listing and sell stock to a wider investor base in early 2019.
The crypto mining startup is still in the exploratory stages, reaching out to investment banks, Bloomberg reported, citing unnamed insiders. Bitfury, which declined to comment for the news agency, may pursue other financing options, including debt issuance of debt or a stake sale. It is aiming for a valuation of between $3 billion and $5 billion, much smaller compared to Bitmain’s target of up to $18 billion.
The move immediately drew skeptical reactions from the crypto community, which tracks more closely the challenges of mining. As the mining of Bitcoin and altcoins becomes more competitive and demand wanes, the earnings for sector companies are diminishing, as Bitmain’s weaker ASIC rig sales indicated when the company published its IPO prospectus.
Bitfury is one of the rare competitors to Bitmain, with the Tardis and Clarke mining machines offering different hashrates. Bitfury has developed its own generations of chips, and its pool currently carries 2.75% of the total network hashrate for Bitcoin.
The potential IPO or share sale would not be the first fundraising exercise for Bitfury. According to Techcrunch, the startup has already attracted $90 million in five rounds of funding, the latest one in July 2018.
The Bitcoin hashrate has been unstable in the past months after a large slide from around 56 EH/s to 43 EH/s. Miners often leave the network or join it, depending on profitability. BTC prices have remained relatively stable in the past weeks at about $6,500, which is seen as sufficient for miners to sell some of their rewards and fund their operations.
Bitcoin mining is highly dependent on operations in China, and Bitfury is one of the few competitors with data centers in European countries, including Georgia.