A fund to invest in the world’s first ever Bitcoin mining company through an Initial Public Offering (IPO) in Australia, which recently went live on the online investment platform BnkToTheFuture, has secured pledges amounting to almost US$3m (£1,933,609) – representing 82% of its target – to invest in Bitcoin mining company Bitcoin Group Limited.
With less than 24 hours to go in the fund raising, the ultimate goal is to reach a figure £2,342,804. All money backed in the pitch is final although investments will only be transacted in the IPO – if at least £1,969,192 is pledged by 21 October (05.18am GMT) – just after midnight New York time. That would require a further £35,583 being stumped up.
Bitcoin Group, founded in September 2014, is Australia’s biggest mining company founded in Melbourne after a five-year partnership between Sam Lee, CEO, and co-founders Allen Guo and Ryan Xu. It finally rounds off its IPO next month – at the third attempt. Still, they’ve got there.
It comes after the Australian Securities and Investment Commission (ASIC), the financial regulator, put two stops on the firm’s original fund raising efforts. The second occasion was when the fundraising round was being promoted on We Chat, a Chinese social media platform, prior to the prospectus being lodged and approved.
Now Bitcoin Group is scheduled to list shares in a A$20m (c.US$14.57m) public offer on the Australian Securities Exchange (ASX) in Sydney on 11 November 2015, having secured approval from ASIC. It follows bitcoin start-up digitalBTC listing last year on the ASX via a reverse listing.
With operations in China, Iceland and Australia, the company is focused on becoming one of the world’s largest Bitcoin mining companies and on creating a more convenient means by which the general public can manage and transfer money.
Currently it produces around 1.57% of the global mining output through its seven mining sites and in the period 2014-15, it mined around A$2m worth of the crypto-currency.
Continued from page 1
What Is Bitcoin Mining?
With Bitcoin, miners use special software to solve mathematical or algorithmic problems and are issued a certain number of bitcoins in exchange for their effort in contributing computational power. Specifically it is accomplished by running so-called SHA256 double-round hash verification processes so as to validate Bitcoin transactions and provide the necessary security for the Bitcoin network’s public ledger. The speed at which one mines Bitcoins is measured in hashes per second.
For its part, Bitcoin Group has a portfolio of just over 6,000 specialized Mining machines, with an output of 6.2 Petahashes, which powers their 1.57% market share. And, for that they receive around 62 Bitcoins a day.
Opportunity For ‘Qualifying’ Investors
Prior to the IPO, Bitcoin Group opened up the opportunity to qualifying investors to invest online via BnkToTheFuture, which has seen over $30m invested this year in financial innovation and tech investment opportunities like Bitcoin Group.
BnkToTheFuture’s platform allows qualifying investors a route to what it describes as investing in the ‘future of finance’. To date the platform has invested just over £23m for 14,305 professional investors and has even got the thumbs up from Virgin boss Sir Richard Branson.
Recommended by Forbes
Simon Dixon, CEO of BnkToTheFuture, commenting says: “Stock exchanges around the world have a long history in listing gold and oil mining stocks. However, Australia will become the first ever [country] to list this new form of mining stock.”
According to Sam Lee, Bitcoin Group’s CEO, the impending IPO would bring “greater legitimacy” to the industry and lead to greater transparency and awareness on behalf of prospective investors.
He adds: “As an industry leader and soon-to-be ‘sharemarket’ pioneer, we play a critical role in continuing to educate the market while providing investors access to an exciting, high-growth industry sector through a profitable investment vehicle.” Bold stuff.
Continued from page 2
Bitcoin itself was invented as a payment system in 2008 and released as open source software in 2009, Bitcoin mining was designed as an incentive for ‘Miners’ to secure the Bitcoin Network by validating transactions, which in turn gives Miners such as Bitcoin Group access to newly minted Bitcoins.
While Bitcoin today currently trades at around $267 per Bitcoin (BTC) – down some 37.5% from its 52-week high of $427.24 reached on 12 November 2014. But earlier this month (6 October) the price of Bitcoin on the Coindesk USD Bitcoin Price Index rose to $247.57, which was its highest level since 18 August 2015.
Of course if the price of Bitcoin picks up further between now and the first half of 2016 an investment in the fund and this IPO could well make sense. Shares in Bitcoin Group are expected to start off at A$0.20 on the ASX, with just over 60% of the company owned by the market and around 8.6% owned by directors Lee, Guo and Xu. But predicting the future is anything but easy. Carpe diem.
Page 3 / 3
With less than 24 hours to go in the fund raising, the ultimate goal is to reach a figure £2,342,804. […]