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Their upcoming IPO makes a lot more sense now.

They have been propping up bitcoin cash price by (1) requiring ASIC purchases to be made w/ bch (2) not selling the bch they earn (3) actively buying bch with btc and (4) protecting the chain from 51% attacks.

As a result, Bitmain currently has a ~$500M bag of ~1M bitcoin cash that they can't sell without cratering the price. Even just selling a fraction could spook the bch market.

The IPO is a way of 'selling it' without selling it.

@mattodell with this insight, it seems Btc Maximalist strategy is becoming a truism: buy more btc, secure it, and hodl on for the ride😎

@mattodell I really don’t think so. They are valued at $18b, a $500m bag is inconsequential.

@Dennis True, but it was worth almost $2B in May, and was still over $1B in June.

@mattodell @Dennis these valuations are wrong though. If you assume Bitmain to be a dominate bitcoin miner and manufacturer then yes. But the aren’t. Bitmain sole focus is on BCash. Which this filing shows. So if any investor is buying the IPO they are buying a company that it’s business model is to support an asset that is 1/10 the value of bitcoin.

@hanakookie @mattodell this single PowerPoint slide is just showing their crypto holdings. More important is that they made $1b profit just in Q1 2018. The valuation is justified IMO.

@Dennis @mattodell I heard they transferred a lot of the other assets out into different entities, so that the one they are IPO’ing only has the shit left in it

@mattodell

Getting trapped in your own built downward spiral.

@mattodell I tend to agree. I saw a similar thought from Whale Panda. Jihan is not dumb by any stretch.

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