Bitcoin mining IPOs are coming at a really tricky time

Bitcoin’s big stock market debut is coming at a bad time.

Three of the world’s top makers of cryptocurrency technology are planning to sell shares, giving investors a new way to bet on digital currencies. They’re reportedly hoping to raise billions of dollars.

Unlike the dollar or the euro, which are issued by central banks, cryptocurrencies are based on computer code. Bitcoin, for example, is created and traded through the “mining” process in which computer algorithms solve increasingly complex math problems.

Bitmain, Canaan and Ebang, which are all based in China, make money by selling the high-tech parts and systems that power this mining. Together, they dominate the business.

But the three companies operate in a young, unpredictable industry and are planning their IPOs in Hong Kong in brutal market conditions. The price of bitcoin, which soared to nearly $20,000 in December, has since plunged by about two-thirds. Other cryptocurrencies like ethereum have plummeted, too.

“If the market price of cryptocurrencies suddenly falls … demand for our mining hardware and cryptocurrency mining services will also drop rapidly,” Bitmain warned potential investors this week.

Bitmain is the world’s biggest maker of bitcoin mining technology.

On top of that, Hong Kong’s stock market, where the companies plan to list, entered a bear market this month, having plunged more than 20% from its previous peak because of concerns about China’s economic slowdown and trade war with the United States.

The mining technology companies haven’t said when exactly they plan to go public or how much they’re seeking to raise. Bitmain and Canaan declined interview requests, while Ebang didn’t respond to a request.

“These firms might be looking to cash out before the market takes an even steeper nosedive,” said Benjamin Quinlan, founder of Hong Kong-based financial services consulting firm Quinlan & Associates.

He points out that cryptocurrencies are slowly gaining more acceptance among mainstream investors despite recent setbacks, and that the three mining companies’ revenues are still growing. But the industry faces major challenges.

A key one is how governments go about regulating digital currencies. Last year, China banned most activities involving bitcoin. The country is still thought to be home to a significant number of cryptocurrency mining operations, but authorities have been trying to push them out.


Cryptocurrency miners need huge amounts of electricity to run their rooms full of computing equipment around the clock. Some public utilities in the United States are already introducing higher tariffs specifically for miners.

“Increasing the cost of bitcoin mining will decrease the demand for mining equipment, hindering the performance of these companies,” Quinlan said.

Mining cryptocurrencies is already less lucrative than it used to be.

Bitcoin mining activity has exploded over the past year, boosting demand for the technology. But that means the profits from mining are spread more thinly across a greater number of users. That could hit future demand for mining equipment.

Will the mining boom last?

Bitmain, Canaan and Ebang were all profitable in their most recent financial year, according to documents setting out their intention to go public.

But staying in the black will be a “massive challenge,” said Leilei Wang, a Shanghai-based consultant at research firm Kapronasia.

The companies are aware of the risks they face and are trying to adapt. For example, they say they are increasing investment in more advanced chip technology that can be used in areas like artificial intelligence, cybersecurity and connected devices.

He bet on Bitcoin and lost nearly everything

Although the Chinese government has a tough stance on cryptocurrencies in general, it’s eager to bulk up the country’s technological prowess in areas like computer chips. Chinese companies are still largely reliant on foreign chip technology, especially from the United States.

“Whether [the cryptocurrency companies] are able to successfully pivot remains to be seen,” Wang said.

For now, their fate is tied to that of the wider industry.

“Cryptocurrencies will likely fall out of favor” without greater mainstream adoption in the near future, Quinlan predicted. The mining equipment makers “will find it extremely difficult to survive when the cryptocurrency market, as a whole, withers away,” he said.

But bitcoin bulls are still hopeful that the currency can stage a recovery as financial exchanges and big companies start to take it more seriously.

“As you see more adoption of just people being comfortable with it, it feels like it’s going to go up,” Mike Novogratz, CEO of cryptocurrency investment firm Galaxy Digital, told CNN this week.

CNNMoney (Hong Kong) First published September 27, 2018: 6:56 AM ET

Source link

Donation laws prove tricky in phoney war on super — while the real war hots up

While the Liberal Party continues to attack the sector super sector, the profound flaws on the retail tremendous design are about to be played out in courtroom.

Liberal MP Tim Wilson (Graphic: AAP/Mick Tsikas)

Although the Liberal Social gathering, and related media organs keep on to assault superannuation, a incredibly authentic sequel to past attacks is about to engage in out in courtroom.

Crikey has been waiting around with bated breath for when the hottest set of responses to concerns about super money requested by Household of Reps economics committee chair Tim Wilson would mysteriously transform up in the offices of the Financial Review and Information Corp papers.

Oddly, immediately after we named this peculiar phenomenon out and commenced asking Wilson on Twitter about when we could anticipate anti-industry money posts primarily based on the responses to commence demonstrating up in the media, no this sort of content articles appeared in its place, the answers popped up exactly where they are meant to be — on the committee’s internet site.

On nearer inspection, nonetheless, we just can’t just take any credit rating for that, due to the fact it seems that super cash gave Wilson and his tame journalists minor to work with.

Get for example Wilson’s dilemma about super resources lending fairness to two favourite targets of the anti-industry fund marketing campaign, Hostplus and Relaxation. “Since 12 March 2020, has your fund presented any liquidity to: a) Relaxation? b) Hostplus? c) any other superannuation fund?” Wilson demanded of super funds, nervous to sniff out a suggestion that business resources ended up propping up their mates. “No,” they unanimously chorused — which includes Hostplus and Rest.

But Wilson went further. He asked Hostplus, Rest and a different field fund, CBUS, “is your fund now going through a liquidity disaster?” and if not, “is there one more crisis your fund is presently experiencing?”

Let us phase back for some perspective below: this is the chair of Parliament’s economics committee suggesting — as section of an ideological campaign versus field super resources — that a few industry cash may confront a liquidity or some other form of disaster.

If the current market didn’t know that backbench hacks like Wilson are simply engaged in their program assaults on the market sector, such solutions could have actual and detrimental effects for the funds — which definitely could not have been Wilson’s intention?

Hostplus observed that given there was a world pandemic, it experienced activated its disaster administration strategy “to guarantee the protection of its staff members and the continuity of provider to its members” but in any other case there was no disaster. “Cbus is not now experiencing a liquidity or any other sort of crisis,” Cbus replied.

It was field fund peak physique Business Super Australia, having said that, that ashamed Wilson, who assumed he experienced caught ISA out in the fabled Labor fundraising that Liberals have been accusing the business sector of.

“In the 2018-19 year, according to AEC documents, ISA made a contribution of $1,600 to the Labor Social gathering. Can you offer clarification on that?” he demanded at a listening to in May well. ISA was content to.

“ISA attends the government’s price range night purpose and opposition spending plan reply perform, tickets cost $800 for each human being and two ISA personnel attended equally functions in 2018/19. The Labor Get together has a lower reporting threshold for receipts to the AEC than the Liberal Party which describes why the AEC described this expenditure on its web-site for the opposition (Labor) function but not the govt (Liberal) event.”

Wilson experienced been caught out by his have party’s refusal to offer transparency about its political donations.

Whilst Wilson and co are squandering the time of tremendous resources with vexatious issues, the Australian Securities and Investments Commission — these times at minimum making an attempt to do the occupation it conspicuously avoided accomplishing for so many a long time — was planning a big scenario against Colonial Very first Condition and its previous operator (now part-operator), the Commonwealth Financial institution.

In an motion submitted on Monday, ASIC promises that CFS compensated CBA to market its “Essential Super” item by way of its department community from 2013-18 — paid $22 million, to be specific, masking nearly 400,000 individuals who finished up signing up. Following the Hayne royal fee uncovered the arrangement, ASIC filed a civil circumstance towards both equally of them underneath the conflicted remuneration provisions of the Long term of Economic Guidance rules set in area by Bill Shorten when Labor was in authorities. That’s the FOFA guidelines the Liberals attempted desperately to repeal when they bought into authorities.

The Important Super situation is the best demonstration of what was mistaken with retail super and why the FOFA guidelines ended up important. The Commonwealth Lender was paid out by its subsidiary to flog a super solution to consumers allegedly regardless of their personal money needs and regardless of the performance of the fund. And Important Tremendous and CSF associates paid for the privilege by means of a movement of revenue to CSF’s proprietor.

There was certainly a disaster in superannuation — a single the Liberals overlooked until eventually they had been pressured to call a royal commission that uncovered these kinds of rorts.

Peter Fray

For a restricted time only, opt for what you fork out for a year of Crikey.

Help save up to 50% on a year of Crikey, or, dig further so that we can dig further.

Crikey could be little but our target has generally been to concentration on the why, not the what of general public lifestyle — to describe how electricity is used and abused in Australia, and the methods and individuals who facilitate it.

But to do that effectively, we need subscribers. Tons of them.

Join Crikey now, and for the initial time ever, pick out what you pay.

Peter Fray
Editor-In-Chief of Crikey

Support us right now

Resource backlink

Tricky’ for Barty to maintain training intensity in shutdown

FILE PHOTO: Australia’s Ashleigh Barty in action during her semi final match against Czech Republic’s Petra Kvitova in February 2020. REUTERS/Ibraheem Al Omari/File Photo

April 25, 2020

MUMBAI (Reuters) – Ash Barty is finding it tricky to maintain high intensity in training during the shutdown but the women’s world number one is hoping she will be back to her usual self with the flick of a switch when tennis resumes after the COVID-19 pandemic.

Like other sports around the world, professional tennis screeched to a halt in early March as the virus spread quickly around the world. It will not restart until at least mid-July.

While Australian Barty, whose partner Gary Kissick is a golfer, has seen her golf game improve during the lockdown in Brisbane, her tennis training is in “a little bit of a holding pattern.”

“It’s kind of tricky to train with the same intensity as always,” Barty, who turned 24 on Friday, told the Sunday Herald Sun. “Obviously, we’re still not sure when we’ll go back.

“Now, it’s about maintaining for if and when we get an opportunity to play again this year, you can kinda flick that switch and go from there.”

The shutdown did not allow Barty to return to the United States to defend her title at the Miami Open, which catapulted her into the top 10 in the rankings before she finally sealed the top spot a few months later.

Barty is also the defending champion at Roland Garros, where she won her maiden Grand Slam title in Paris last June, but that has been postponed too.

This year’s French Open was moved to Sept. 20-Oct. 4 from its May start while the Wimbledon championships, which were set to begin in late June, were canceled.

“Just kind of sitting back, this is really bizarre,” she said. “You’re preparing for that (hardcourt) swing and then you’re on a plane back to Australia.

“It’s different for everyone. For tennis players, there’s that uncertainty. We need for pretty much the whole world to be clear before we can start our tour again.

“Domestic competitions have the chance to get up running again, but for a global sport it’s a bit unique to be in that holding pattern.”

Barty said she was in regular touch with some of her fellow players as she deals with the lockdown.

“All these girls I’ve had really good relationships with and am good friends with on a personal level. We’re also chatting about what could be next for us and everyone is trying to get that new information,” she said.

“Overall, it’s been a bit of an adjustment but also lucky that it’s a time where you get to appreciate the little things in life, which is your health and your family.”

(Reporting by Sudipto Ganguly; editing by Kim Coghill)

Source link