Photo/Shetuwang

Jan. 30 (NBD) -- Hopes of China's three top cryptocurrency mining firms Bitmain, Canaan Creative and Ebang International may have been dampened, as none of them has received approval for their Hong Kong IPO applications to date.

Canaan Creative filed with the Hong Kong bourse for IPO in May 2018, followed by Ebang International and Bitmain.

Comments by Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing Limited (HKEX), saying "the HKEX will adhere to the principle of market adaptability" have been interpreted as the exchange being reluctant to approve the IPO of those bitcoin mining companies.

But related sources with the HKEX said to NBD that Li Xiaojia was explaining the general listing rules, rather than targeting any specific enterprise or industry.

Shen Meng, executive director of Chanson Capital, a boutique investment bank, said that the "adaptability" issue brought up by Li refers to the practice that a company has made billions of dollars through one business, for example, selling mining equipment, but suddenly declared it will get listed in the name of chip design. Such practice will misguide the investors, Shen noted.  

No matter how the message from the bourse is perceived, it's undeniable that the glory of yesteryear surrounding bitcoin or cryptocurrencies in general has been fading away.

The past 2018 saw the bitcoin price plummet to around 3,500 U.S. dollars at the end of the year from 14,220 U.S. dollars at the start of the year, with 70 percent of the value evaporating. The dropping prices are in stark contrast to the all-time high of 19,299 U.S. dollars bitcoin reached in December 2017.

Sales of mining machine, which constitute the major revenue source for miners including Bitmain, was inevitably dragged down by the dipping bitcoin prices.

It was reported that Bitmain incurred losses of 740 million U.S. dollars in the third quarter of 2018, which the miner later denied. But according to the prospectus of Bitmain, the company logged an impairment loss of over 100 million U.S. dollars on crypto assets in the first half of 2018 due to volatile crytocurrencies.

Moreover, Bitmain, Canaan Creative and Ebang International all saw their valuation decline from previous figures, according to the unicorn index released by Hurun Research Institute last Thursday.

Shen pointed out those makers of mining hardware could choose to get listed in the U.S. besides in Hong Kong, China, adding that the U.S. stock exchanges wouldn't conduct any substantive examination on businesses of an IPO applicant but only supervise integrity of information disclosure.

In prior reports of Bloomberg, Canaan Creative was considering listing in the U.S. after shelving plans for a Hong Kong IPO.

Email: gaohan@nbd.com.cn