Bitmain Ditches Bitcoin [BTC] and Ethereum [ETH] for Bitcoin Cash [BCH]
Bitmain, the crypto mining hardware giant, has sold much of its Bitcoin [BTC], and Ethereum [ETH] holdings to purchase humungous amounts of Bitcoin Cash [BCH].
According to the Bitmain pre-IPO investor deck, they sold most of their #Bitcoin for #Bcash. At $900/BCH, they've bled half a billion in the last 3 months. If Bitcoin Core devs didn't disclose the Bcash vulnerability, it could've wiped a billion dollars off their balance sheets. pic.twitter.com/9BMywdvvby
— Samson Mow (@Excellion) August 11, 2018
The crypto mining hardware manufacturer currently holds 1,021,316 BCH which is roughly 5% of the total amount of BCH in circulation as of now. Originally costing the company 1 billion USD, the holding is now valued at 600 million USD.
Trustnodes revealed a leaked prospectus of the initial public offering (IPO) of Bitmain, giving us insights about how much holdings the mining hardware giant has when it comes to Bitcoin cash (BCH), Bitcoin (BTC), Litecoin (LTC) and Dash. The leaked prospectus revealed that Bitmain isn’t keen on keeping Ether at all.
Apart from BCH, the company has LTC and Dash in its portfolio. Costing 51 million USD at the time of acquisition, the company’s 931,932 LTC is now valued at 60 million USD. When it comes to the 312,424 Dash which the company holds, it cost them 103 million USD when purchased originally. As of now, it is valued at 52 million USD.
Compared to that, Bitmain’s share of ETH holdings is a mere 1097 ETH originally bought at 800,000 USD which are now valued at 500,000 USD. The reason behind that could be the fact that ETH is usually mined using GPUs instead of ASIC miners. As we all know, it is the latter that the company is known for.
Bitmain recently boasted the huge gains the company saw in 2017—from a profit of 100 million USD in 2016 to a profit of 1.1 billion USD in 2017. In the crypto industry, without any doubt, it is the company which owns the highest market valuation at 15 billion USD.
A Reddit user DetrART said:
“Bitmain is essentially the Federal Reserve of BCH.”
Another Reddit user who goes by the name junglehypothesis commented:
“What a poor decision by Jihan. 1 million times nothing equals nothing.”
The community always has people speaking in favor of, and against everything that comes up. That said, Bitmain shedding out ETH is a big deal.
ETH isn’t the only cryptocurrency the crypto mining hardware manufacturer has shed out to buy more BCH. Bitmain has also sold out its BTC holdings to buy more BCH.
As Bitmain prepares to be listed on a stock exchange, perhaps that of Hong Kong, this preference of theirs could actually result in some interesting implications. The company would hit the stock exchange at a valuation of no less than 18 billion USD.
The company’s management has always had a bias for Bitcoin Cash, which was made pretty evident through “Wormhole”, a proposal by the developers associated with the company. It would be a layer to build smart-contracts on the blockchain of Bitcoin Cash.
Last week, the company announced that it would be investing 3 million USD in a digital advertising company powered by Bitcoin Cash. The digital advertising company would be using an unspecified smart contract protocol based on the Bitcoin Cash blockchain for developing its own token.
It would be worth watching how the actions of the company mold its future after the IPO.