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Bitmain revives IPO plan as Bitcoin hits one-year high of US$9,700

Hong Kong

BITMAIN Technologies Ltd, the world's biggest producer of cryptocurrency mining chips, is reviving plans for an initial public offering (IPO) as Bitcoin climbs to a one-year high, people with knowledge of the matter said.

The company is working with advisers on preparations for a US share sale that could take place as soon as the second half of this year, the sources said. Bitmain aims to file listing documents with the US Securities and Exchange Commission as soon as next month, they said, asking not to be identified because the information is private.

Bitmain, which was valued at about US$15 billion in a private funding round last year, is considering reducing its earlier fundraising target due to the increased volatility in cryptocurrency prices, according to one of the sources. It could raise about US$300-500 million from the US share sale, though it has not finalised the amount that it wants to seek, the sources said.

The company was previously pursuing a Hong Kong IPO of as much as US$3 billion, Bloomberg News has reported. Bitmain's listing application lapsed in March. Smaller rival Canaan Inc is also considering selling shares in the US after dropping plans for a Hong Kong IPO, people with knowledge of the matter have said. Another chipmaker, Ebang International Holdings Inc, this week let its Hong Kong listing application lapse for a second time.

Potential IPOs by Bitcoin-related firms have spurred debate in Hong Kong, which has sought to attract more high-growth technology companies to its market while still preserving protections for the city's legions of retail investors. Hong Kong's stock exchange and regulators consider IPOs by cryptocurrency companies to be "premature", the South China Morning Post newspaper reported in December, citing unidentified people.

Bitmain is preparing the share sale as the price of Bitcoin surged past US$9,700 on Friday to the highest level since March 2018. The digital currency has jumped more than 160 per cent this year and the Bloomberg Galaxy Crypto Index, which tracks some of the largest cryptocurrencies, has doubled.

At the same time, the space is gaining acceptance from mainstream institutions. Facebook Inc has announced that it will launch its own cryptocurrency, Libra. Firms such as E*Trade Financial Corp and Fidelity Investments are also planning new crypto trading services, Bloomberg News has reported. BLOOMBERG