Bitcoin’s mining hardware manufacturing company Ebang suffered losses of $ 2.5 million. The information was released a few days after the Chinese company’s debut on the New York Stock Exchange.
Given the intention to participate in the aforementioned North American exchange, Ebang filed a report with the Securities and Enchange Commision (SEC). In it, the company detailed the balance of its losses during 2020.
In the report, the company ensures that, if the Initial Public Offering (IPO) is approved, it would reach a value of 800 million dollars. In this way, the mining equipment manufacturer Bitcoin, would become the second of its kind to enter Nasdaq.
Bitcoin mining equipment manufacturers in trouble
The economic losses by companies dedicated to Bitcoin mining is not something that only Ebang suffers. Recently, other negative cases have been known, such as Canaan Creatives, which announced sales problems, with losses of $ 5.6 million and a prolonged process of falls on Nasdaq.
But the most resonant case of the Bitcoin mining hardware manufacturers is Bitmain. It is the market leader in terms of size and expansion. This Asian company has fallen dramatically in recent months due to serious internal problems, added to which is the impact of the COVID-19 pandemic.
Out of the top 5 Bitcoin mining companies, the best stop seems to be MicroBT. Powered by competitive hardware (the M30S +), with a power of 100T and an efficiency below 30W / T, this manufacturer has advanced in the market in an impressive way.
MicroBT is occupying the spaces left by Bitmain. Now, the former becomes a key part of the growing Bitcoin mining business in the United States.
In the most recent report from the BitMEX firm, all the details that ASIC manufacturers currently suffer are detailed. In this way, Bitcoin mining and, consequently, the Hash Rate of the main cryptocurrency depend on companies that are struggling to overcome the drawbacks.
Ebang does not give up
Although Ebang is far from Bitmain and MicroBT in the market, and its equipment is very low-performing, the firm is enthusiastic. In the aforementioned report, they express their optimism of using the funds generated in Nasdaq, to drive the expansion and development of new highly competitive teams.
Currently, in the ranking of the five dominant companies in the field of Bitcoin mining, Ebang is in last place with Innosilicon. Despite this, his goals seem clear: “Strengthen our leadership position and increase our investments in the development of ASIC chips and Blockchain technology.”
Another of the manufacturer’s objectives, expressed in the report, is to expand its business to other areas. They explain that with the expansion towards new businesses in Blockchain and cryptocurrencies, they will be able to diversify their offer and gain more ground and recognition in the international market.
It should be noted that trading at $ 800 million seems ambitious. This is the opinion of the researcher and analyst at CoinDesk, Matt Yamamoto, who describes the company’s ASICs as “not very competitive” compared to the mining companies of other companies, which, he says, are “Technologically more advanced or energy efficient”.
What are the announced losses due to?
As mentioned at the beginning, the company acknowledged having lost about $ 2.5 million during the first quarter of the year. This translates into approximate costs in revenue of $ 6 million.
However, they affirm that, despite these significant losses, the income of those first three months of the year was higher than that obtained during the same period in 2019. They assure that they were positive by more than 6%.
The reasons for the losses that Ebang suffered in terms of the sale of Bitcoin mining equipment were similar to those of its competitors. In this case, market disruption as a consequence of the coronavirus pandemic.
Tensions between China and the United States could affect
Tensions between two of the world’s largest economies today have deteriorated. The main source of problems between China and the United States to exacerbate the situation has been related to the COVID-19 pandemic.
All of this has caused uncertainty and nervousness among investors. The US Senate recently passed a bill that could ban some Chinese companies from listing on the United States.
About this, Ebang expressed his concern. They claimed that such regulatory laws could cause uncertainty. “The stock price could be adversely and materially affected.”
Importance of Ebang in the ASIC market
Ebang is a Chinese company, whose specialization is the manufacture of ASICs hardware for Bitcoin mining. Its origins go back to 2010 when they registered as manufacturers and merchants of technological equipment.
The best cryptocurrency generating device that they currently have is the EBIT E12 of 44Th / s. The company is taking steps in the area of 5G technology and Artificial Intelligence, as they affirm on its official website.
Data to consider
- To launch an IPO, you need to file a balance of financial status with the SEC.
- If it were to participate in the New Tork Stock Exchange, Ebang would be listed at 800 million dollars.
- By entering its shares into Nasdaq, Ebang would become the second Bitcoin mining firm to do so, after Canaan Creatives.
- Bitmain’s market share declined from 75% to 46%. Meanwhile, MicroBT, between 2017 and 2019, occupied from 7% to 35%.
- In 2017, Ebang was fighting Canaan for second place in the market.
- Since last April, Ebang intends to participate in an IPO.
The information in this content has been extracted from reliable sources detailed below:
1- Content managed professionally by the authors of CryptoTendency.
2- External sources: sec.gov, blog.bitmex.com, bloomberg.com eleconomista.es and miner.ebang.com