IPO Corner: Time To Review The Crypto Miners

Crypto and blockchain are all the rage these days… it feels impossible to get away from. We guess then, it should surprise no one that we see that spilling into the IPO space… and we do mean spilling. There must be something in the water because there is a plethora of mining companies ready to step into the public limelight in the coming months, so let’s talk about it. But first… what’s the market look like and what can we expect in the space in the coming years?

According to recent research, the cryptocurrency mining market size is growing by leaps and bounds and is expected to reach $5293.9 million by 2028. While that’s not the kind of money that putts flutters in the stomach, it’s a pretty big deal when you consider that, just a few years ago, crypto and crypto mining were barely blips on the radar of the world at large. But that has changed, drastically. While the crypto space at large is experiencing some turbulence, the greater underlying mission of the technology remains the same, and it’s not going anywhere.

Exponential growth is happening, and will continue to happen in this space, especially if we consider the rapid acceleration of the adoption of various digital currencies around the world (which we’ve covered in recent issues)… the rise of this space will continue, even as we see the inevitable changes in the space take shape as it matures…

The dip doesn’t mean death, not for those who understand that regardless of what the most popular meme coin may be at the moment, they’re just practice and testing for structures that will ultimately settle into place… and that structure is what’s interesting here, that’s what we want to focus on and take note of as we watch the drama unfold. And it is global… researchers have identified developing countries as places where we may really see this space stretch its legs and show us what it can do.

Digital Shovels, Digital Gold

Briefly, let’s recap what crypto mining is… cryptocurrency must be created through a process called mining. The mining process for cryptocurrency involves computers doing work where they solve highly complex math problems. Once a computer solves the math problem, this validates transactions already happening on the ledger (blockchain), and “discovers” new coin. That new coin is then added to the ledger… it has been mined.

A great way to think about this is mining for gold. Imagine you are mining for gold, and you find a nugget, you then take that nugget and put it into circulation with the rest of the gold nuggets. You have mined, and this is not that different from what coin miners are doing. And once these miners discover that nugget (solve the math and mine the coin), if they are the first to do so, they are rewarded for that discovery with cryptocurrency. This is how they make money mining; they unlock and earn coins through validations on the blockchain ledger.

Deals To Watch

Like we said… it’s pouring crypto mining IPOs, somebody get the umbrella! We’re going to have a look at a few companies pushing up through the dirt to grow past their competitors at this time: Rhodium, Celsius Mining, Applied Blockchain, and Nano Labs.

Rhodium is a digital asset company based in Texas that uses proprietary tech and liquid cooling technology to self-mine Bitcoin. The firm has lofty goals, aiming to become the most low-cost, efficient, large-scale player in the space (which we tip our hats to). The company, which is valued at over $1.7 billion filed with the SEC earlier this year and plans to offer shares between $12 to $14 each to raise $100 million. With the funds, the company plans to expand operations. While an initial date was set for earlier in the year and was pushed back, we do still expect to see this IPO happen.

Celsius Mining is a subsidiary of the crypto lending platform Celsius network, which was founded by Alex Mashinsky in 2017 and allows users to earn interest by holding cryptocurrencies. The firm has grown quickly during its short lifetime, with over 1.7 million users on the platform holding over $16.9 billion in assets… the network initially got into crypto in 2020 with investments of over $200 million in Bitcoin mining infrastructure and equipment leases to several mining firms. Celsius recently announced that the mining subsidiary filed a Form S-1 draft registration statement with the SEC, a firm date for the IPO is not yet set in stone.

Applied Blockchain is an enterprise blockchain firm which builds data centers for crypto mining based in Dallas, Texas. The company was founded just a few years ago and was supported by private investors, including names like Algorand Foundation, QBN Capital, and Shell. The firm is preparing for a $60 million initial public offering on the Nasdaq market, according to a recent SEC filing. The company plans to offer 3.2 million shares at around $18.54. Funds raised will be used to acquire additional properties for expansion, the company’s first center in North Dakota currently provides 55 megawatts of energy to customers.

Nano Labs is a Chinese block reward mining chip designer looking to go public in the U.S. with a listing on the Nasdaq and aiming to raise $50 million from American depositary shares to pivot functionality to serving metaverse platforms. Co-founder Kong Jianping sees major potential in the metaverse, even going so far as to insist that it will push humankind into its next era. According to him, the firm will help develop and “cognize” the Metaverse. The company was founded by two pros already familiar with blockchain mining from a previous project as executives at another hardware company called Canaan. The company filed a Type F-1 with the SEC in the second week of June, a listing date has yet to be announced.

Wow, it’s a lot to take in… is it an indicator of what’s to come, firms seeing dollar signs and jumping into crypto mining as fast as their little legs can take them? And, amidst an energy crisis, how will this sector shape up to combat those problems? That’s part of the fun of moving in such a new space with so much potential, and we’d love to see one of these firms end up on our Buy List. Will they make it? Stay tuned.