Want Sequoia Capital and IDG to cash out? Bitmain may choose to list in Hong Kong

If there is one major player in the cryptocurrency mining space, it’s Bitmain, and now they are considering going public — which could set a new IPO milestone in the crypto industry.

Will Wu Jihan and Zhan Ketuan become the ultimate winners of the listing?

With his baby face, wire-rimmed glasses, T-shirts, jeans and sneakers, Wu Jihan looks like a geeky teenager rather than a billionaire. But thanks to his early entry into the cryptocurrency market, the 32-year-old may already be one of the richest people in the crypto industry.

Bitmain, the world's largest cryptocurrency mining chip maker controlled by Wu Jihan, has kept a low profile since its founding five years ago. But now, Wu Jihan is trying to unveil the mystery of Bitmain - as he hopes to expand further in the crypto industry, he may eventually choose to take Bitmain public.

In an interview with Bloomberg, Wu Jihan revealed that Bitmain's revenue reached $2.5 billion last year, and he and another co-founder Zhan Ketuan jointly own 60% of the company. Although there is no "reference" for companies like Bitmain, if we refer to listed chip manufacturers such as Nvidia and MediaTek, the Bloomberg Billionaires Index estimates that Bitmain's company valuation will reach $8.8 billion - in other words, the shares held by Wu Jihan and Zhan Ketuan will be worth $5.3 billion.

Wu Jihan also revealed that his shares are not as large as Zhan Ketuan, but refused to disclose details of his personal net worth, cryptocurrency holdings, and other personal investments. Previously, Wu Jihan said that Bitmain’s valuation could reach $12 billion, while Zhan Ketuan refused to comment on the matter.

Let Sequoia Capital and IDG Capital exit?

Previously, given the uncertainty of digital assets and the limited public information of Bitmain, many people have speculated about the corporate value of Bitmain and Wu Jihan’s personal wealth.

But if Bitmain successfully goes public, these doubts will now change. An IPO listing will not only allow Bitmain to face the world openly, but also reflect their company value in real time through the reaction of the stock market . Although Wu Jihan said that there are no specific plans at present, he said that it can be listed in Hong Kong, or choose to list stocks denominated in US dollars overseas - the reason for doing so may be that they hope to give early investors including Sequoia Capital and IDG Capital the opportunity to cash out and successfully exit.

There is no doubt that the IPO will be a milestone for Bitmain and the entire crypto industry - at least it will allow Bitmain to walk in the sun. At this stage, regulators in various countries are very cautious about cryptocurrency mining companies, development companies and venture capital companies. If Bitmain can "take the lead" and choose to go public to improve corporate transparency, it will undoubtedly inject a shot of adrenaline into the cryptocurrency market.

In an interview at the Four Seasons Hotel in Hong Kong, Wu Jihan said that the challenge currently facing Bitmain is whether their technology can surpass their current achievements.

Dealing with competitors?

Bitmain's biggest competitor, Canaan Inc., has applied for an IPO in Hong Kong, and people familiar with the matter revealed that they plan to raise $1 billion. Bitmain's revenue last year was about 12 times that of Canaan.

Both companies are involved in custom-made mining chips called application-specific integrated circuits, or ASICs, which are particularly useful for the brute-force number crunching required of cryptocurrency miners, who solve complex math problems to verify virtual currency transactions and earn cryptocurrency-denominated rewards.

Canaan’s cryptocurrency mining equipment accounts for 15% of the ASIC market, while Bitmain controls about 90% of the cryptocurrency mining hardware market (as shown in the figure above, Bitmain’s market share reaches 75%). In addition, Bitmain also operates the largest mining pools, Antpool and BTC.com.

In fact, many people in the industry have expressed concerns about the impact of these two mining groups on the Bitcoin market, as doing so goes against the original intention of the decentralized spirit of cryptocurrency, thus arousing dissatisfaction in the crypto community.