Trio of bitcoin mining equipment makers to list

THREE of the world’s largest bitcoin mining equipment makers plan to raise billions of dollars with initial public offerings in Hong Kong, even as other companies report plunging demand for the chips needed to make bitcoin and a halving in the price of the cryptocurrency.

Soaring cryptocurrency prices last year triggered a boom in demand for specialist mining chips and in developing “mines” – facilities with thousands of machines that create the coins by solving complex mathematical puzzles.

Yet the US chip maker Nvidia Corporation said this month that second-quarter sales to crypto miners totalled just $18 million (R256m), compared with $10m expected by analysts.

Nvidia’s chief financial officer, Colette Kress, said she anticipated “no contribution” to revenues from cryptocurrency in coming months.

That has raised concerns about the upcoming Hong Kong listings by three Chinese manufacturers of bitcoin mining equipment, Bitmain, Canaan and Ebang International Holdings.

The companies all design high-end computer chips intended for mining cryptocurrencies, particularly bitcoin, and sell mining equipment containing the chips. In addition, Bitmain mines cryptocurrencies on its own account. Companies like Nvidia also sell specialty chips used for mining.

“The marked decline in the price of bitcoin since the start of the year is likely to weigh on investors’ interest in these companies,” said Benjamin Quinlan, chief executive of financial services consultancy Quinlan & Associates.