Bitmain Reportedly Suffered $500 Million in Q3 2018 Losses

Omar Faridi

Bitmain Technologies, the leading manufacturer of cryptocurrency mining hardware, reportedly lost approximately $500 million during Q3 2018.

The Beijing-based tech firm recently submitted an update on its financial results to Hong Kong’s Stock Exchange (HKEx), which is currently reviewing Bitmain’s application (filed in September 2018) for launching an initial public offering (IPO).

According to sources familiar with the matter, the mining hardware manufacturer generated over $3 billion in revenue during the first 9 months of 2018. Bitmain earned $500 million in total profits during the same time period. Notably, Bitmain’s financial report has not been shared publicly and sources reportedly told Coindesk that the filing does not break down the firm’s profit and revenue statements by quarter.

$1 Billion In Profits Reported For H1 2018 

Previously, Bitmain’s earning report had revealed that the company earned $1 billion in profits during the first half of 2018. Subtracting this amount from around $500 million in profits during the first 9 months of last year leaves Bitmain at a net loss of approximately $500 million for Q3 2018.

Last year, Bitmain had also reported earning $2.8 billion in revenue during the first half of 2018. Taking this figure and the $3 billion in revenue (recently reported) for the first 9 months of last year results in only $200 million of revenue for Bitmain in Q3 2018. Notably, companies that file for an IPO with HKEx need only provide their financial results for the last 6 months.

Bitmain's Digital Asset Portfolio Loses Over $100 Million

Significantly, the update Bitmain provided to the HKEx also revealed that the company’s cryptocurrency holdings had depreciated in value from over $800 million (in June 2018) to under $700 million by end of Q3 2018. According to Bitmain’s IPO filing from last year, the firm primarily held bitcoin (BTC), bitcoin cash (BCH), ethereum (ETH), litecoin (LTC), and dash. However, the mining giant did not disclose the exact amount of each digital asset it held.

According to CryptoCompare data, all of the cryptoassets held by Bitmain (as mentioned in its IPO application) have depreciated by over 50% in value since September 30th, 2018. The price of bitcoin cash, which might account for most of Bitmain’s crypto holdings, has declined by more than 70% since September of last year.

Bitmain Publishes List Of Achievements For 2018

Bitmain will not have to publicly disclose its 9-month financial report - provided the mining hardware manufacturer can move forward with a listing hearing with approvals from Hong Kong’s stock exchange. Bitmain’s IPO filing must be approved by March 26th, 2019 - as all such applications have a 6-month time frame during which the HKEx is required to review them.

On January 21st, 2019, Bitmain had published a blog post in which it noted its list of achievements during 2018. The detailed post mentioned that Bitmain had made significant progress in developing products for its artificial intelligence (AI) division and provided updates on its expansion into US-based markets.