Although an IPO would be a great way for Bitcoin mining companies to raise funding, the persisting cryptocurrency bear market is hampering their ability to go public, as many exchanges are hesitant to list companies that are strongly related to what is widely viewed as a nascent and speculative market.
This past November, the Chinese-based Canaan let its Hong Kong Stock Exchange application lapse, which signaled that global regulators and exchanges may not be ready to list companies whose performance is closely related to a market as volatile as the cryptocurrency market.
Despite failing to list in Hong Kong, sources are now claiming that the Bitcoin mining giant is now looking to raise capital through a listing in New York, which could occur as soon as the first half of 2019.
Despite this being a strong possibility, the sources cited in the report further noted that the deliberations are at an early stage and there is little certainty that a US listing will actually pan out, as there could be regulatory issues that are faced throughout the listing process.
Bitcoin has been caught in a persisting bear market which lasted throughout 2018 and has continued into 2019. Bitcoin, which is currently trading around $4,000, is down nearly 80% from its all-time-high of nearly $20,000 that was set in December of 2017.
This drop, which has significantly affected the overall cryptocurrency markets and the industry as a whole, has particularly impacted Bitcoin mining equipment manufacturers, who are looking to go public to both secure their positions in the industry and to raise funding to maintain their operations.
This past December, reports surfaced claiming that that the largest cryptocurrency mining company, Bitmain, was struggling to move forward with their $3 billion IPO plan due to concerns from regulators in Hong Kong.
One issue the company is facing is that a regulatory framework that offers guidance on how to handle the public listing of crypto-related companies in Hong Kong is still in the process of being drafted, which is leading regulatory authorities to hesitate on approving the fundraising plan.
Bitmain will likely present in front of a listing committee in a closed-door session, which will ultimately result in a definite approval or denial of the application within six months of the hearing. If the committee fails to give their decision within six months of the hearing, the listing application will lapse.
It is likely that the current state of the cryptocurrency market is contributing to the difficulty of public offerings for companies tied to the industry, and as more regulatory frameworks are put in place and as the markets recover, more companies will begin fundraising through the public markets.