Bitmain, China’s cryptocurrency mining manufacturing giant will be facing fierce competition from makers of rival cryptocurrency mining equipment. While the company eyes a landmark initial public offering (IPO), Bitmain may be in trouble as the demand for cryptocurrency mining falls and new competitors emerge in the market.
Although the cryptocurrency mining industry faces difficult times ahead, BitMEX is, however, performing very well in the market. The cryptocurrency platform has therefore rented out one of the most expensive buildings in the world to expand their team and company.
Bitmain Faces Tough Competition
According to the South China Morning Post, analysts from Sanford C Bernstein & Co. wrote in a report on August 22, 2018, that “the competitiveness of Bitmain’s chips is in question.” Sanford C Bernstein & Co. noted that Bitmain’s financial performance in 2017 was a “wild success” and that such success was largely attributed to its control of the market.
Bernstein noted that Bitmain controlled approximately 85 percent of the cryptocurrency mining chip industry but this will quickly change as new players which include Canaan and Ebang International Holdings also look to IPO in Hong Kong soon.
In addition to the new competition, demand for cryptocurrencies has declined. Demand for cryptocurrency mining equipment has therefore decreased which may impact Bitmain’s growth. Bitmain is, however, looking to undergo an IPO in Hong Kong and may raise as much as $3 billion US. Despite Bernstein’s analysis, Bitmain’s successful IPO would be a landmark event for the cryptocurrency industry.
BitMEX Rents one of the Most Expensive Offices
While Bitmain faces a tough time ahead, The Star Online recently reported that BitMEX, a global cryptocurrency trading platform has leased the 45th floor of the Cheung Kong Center. Offices located in the skyscraper are considered as one of the world’s most expensive offices.
The building also houses Goldman Sachs Group, Bank of America Corporation, Bloomberg LP and Barclays PC.
When Bloomberg interviewed Arthur Hayes, the co-founder of BitMEX in January, BitMEX was located in a logistics and warehouse district.
BitMEX’s decision to spend on expensive offices is a positive sign that despite the bearish cryptocurrency market, trading platforms are still highly profitable and prospering well.
The Hong Kong Economic Times noted that BitMEX’s decision to rent the entire floor of the Cheung Kong Center, measuring approximately 20,000 square feet, is a result of its plans to expand the company.