Uber’s Largest Shareholder SoftBank Denies Deal With Bitmain, Other Investments Uncertain

An official from SoftBank has denied their involvement in the investment deal with Bitcoin (BTC) mining behemoth Bitmain that was reported last week by both crypto and mainstream media sources.

As previously reported, Bitmain had allegedly sealed a pre-Initial Public Offering (IPO) financing deal which had brought its valuation to $15 billion. Both Chinese tech conglomerate Tencent and Japan’s SoftBank — another tech giant whose 15 percent stake in Uber makes it the drive-hailing app’s largest shareholder — were purportedly involved.

After receiving an anonymous tip that Tencent and SoftBank were not actually involved in any deal with Bitmain, Cointelegraph reached out to SoftBank and Tencent for confirmation.

As a response to Cointelegraph’s request for information, Kenichi Yuasa of the Corporate Communication Office of SoftBank Group Corp. stated:

“Neither the SoftBank Group Corp. nor the SoftBank Vision Fund were in any way involved in the deal.”

Despite numerous requests for clarification, no one at Tencent has denied or confirmed the deal to Cointelegraph.

In response to a media request from Cointelegraph, Bitmain refused to comment on the matter.

The original story on SoftBank and Tencent’s participation in a deal with Bitmain was reported by Chinese publication QQ on August 4. In a Google Translated version of the article, QQ stated:

“The mainland officially completed the Pre-IPO round signing. This round of investors includes Tencent, Softbank [sic], and China Gold. The current round of financing is 1 billion US dollars, and the pre-investment valuation is 14 billion.”

After the story originally broke, there were no official confirmations or denials by either SoftBank or Tencent of their participation in an investment deal with Bitmain.

QQ’s report was picked up by mainstream media sources like Business Insider, which reported on August 14 that Bitmain had closed a “$1 billion funding round led by Chinese tech giant Tencent and Japan’s SoftBank,” linking their source as crypto media site CCN. Yahoo! Finance also repostedthe story on Bitmain’s valuation from CCN, also linking to coverage of the matter from crypto news source CoinDesk.

As the media began reporting SoftBank and Tencent allegedly participated in a deal with Bitmain, bringing the company’s reported valuation to $15 billion, Blockstream CSO Samson Mow tweetedAugust 11 an image — reportedly from the Bitmain pre-IPO investor deck — showing the company allegedly had a large amount of Bitcoin Cash (BCH).

On August 12, Samson Mow also tweeted two images of Bitmain’s Q1 results, one in Chinese and one from Morgan Stanley, commenting:

“Why is Bitmain raising capital so fast & only showing Q1 results to pre-IPO investors? We’re well into Q3 now. The reason is Q2 was a disaster. Bitmain is sitting on a massive $1.24 billion USD in inventory & S9 prices dropped by ~85%! Q2 losses range in the $600-700 millions.”

In response to Mow’s tweets, Crypto Herpes Cat published a follow up on Medium, explaining several theories as to how Bitmain ended up with so much BCH — other than by selling BTC for BCH, as Mow purported — and what they are doing with their ASIC miners in a bear market, writing:

“How do you realize the value of this monolith crypto business and your holdings? You IPO and pass the bag on in one huge lumped stock offering and hope investors don’t realize all of your current assets are very, very illiquid.”

As early as June, Bitmain CEO Jihan Wu had hinted at the firm’s plans to launch its IPO on the Hong Kong Stock Exchange. Chinese publication QQ — the same source that alleged both Tencent and SoftBank’s involvement in the recent financing deal — has recently suggested that the firm will be valued at $30 billion.

The seemingly refuted investments come after a year of reports that appeared to indicate Bitmain’s astonishing profitability.

AltcoinToday.com

Photo via Shutterstock.

Source: Cointelegraph

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Cryptocurrency Miners Ignore the Bitcoin Price Fall, Focus on Expansion Instead

The recent decline in cryptocurrency prices has cast a shadow on several aspects of the digital currencies space. However, one area where this bearish outlook has not extended to is cryptocurrency mining. 


The Hash Factor is an Indicator

According to a report from Bloomberg, bitcoin mining has remained profitable for some miners who have improved their investments and efficiencies in the space — even against the continued bitcoin price drops.

One of the indicators of this has been the increased hashrate, which is the computing ability for mining bitcoin measured on the Bitcoin network. The increased hashrate corresponds with additional investments made by miners into computing power.

At the start of August 2018, Bitcoinist reported that the Bitcoin network’s hashrate had recorded an all-time high of 52 quintillion hashes per second. This ties in with a hashrate growth that started in late 2017 and has extended into 2018. During this period, some of the larger players in the mining space strengthened their positions by investing in better hardware and setting up operations in countries like Georgia — which offer competitive advantages in the cost of power.

These efforts have translated into efficiencies that have made mining activities viable for some operators — even as prices remain subdued.

Chinese Authorities Seize 600+ Computers Used for Bitcoin Mining

Miners Dig Deep for Efficiencies in Expansion

To ensure viability, most cryptocurrency miners are now expanding their capacities — and the industry could see increased investments which help them operate close to a breakeven point.

Operators in the industry like Marco Streng, the CEO of Genesis Mining, have shared this sentiment. Streng was quoted as having said in an interview:

There are still major expansions happening, especially from more efficient miners. The expansion is so big that it compensated for the drop-out of not-so-efficient miners.

Another effect of any expansion in capacity will be the increased hashrate signifying some form of long-term commitment as miners dig in their heels even with low bitcoin prices.

Speaking on this issue, David Sapper, the CEO of Blockbid Pty Ltd. — a cryptocurrency exchange in Melbourne, Australia — said:

 The increased hash rate means people are here for the long-term because they’re happy to just accumulate what they have, potentially even run at a loss.

Do you think miners can continue to bet against price volatility using production efficiency? Let us know in the comments below.


Image courtesy of Shutterstock.

Crypto Mining Decline Deals Blow to Nvidia Bottom Line

Due to the ongoing decline in cryptocurrency mining, Nvidia Corp. shares dropped 5% on Friday to close the day at $244.82, down from $257.44 on Thursday. Analysts for the company are estimating third-quarter earnings of between $3.19 and $3.32 billion.


The drop follows a Wednesday-to-Thursday loss of nearly 6.5% for the US-based GPU manufacturer. The loss comes amid reports that Nvidia’s cryptocurrency-related sales were significantly lower than expected in Q2 2018. Furthermore, according to Marketwatch, the company isn’t counting on any such sales for the remainder of the year.

Nvidia’s Chief Financial Officer, Colette Kress, stated:

Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million.

She added:

Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.

This is in stark contrast to a year ago, when Chief Executive Jensen Huang spoke enthusiastically about cryptocurrencies and the crypto mining market:

Crypto is here to stay, and the market will grow to be quite large. […] It’s not likely to go away any time soon. There will be more currencies to come, they will come from different nations…We stay very close to the market, and understand the dynamics very well.

Nvidia Down But Not Out

Despite the fact that Nvidia’s PC and mobile OEM revenue, in which cryptocurrency related sales are included, fell by 54% to $116 million, the company realized significant gains in other areas:

  • Gaming revenue up 52% to $1.81 billion
  • Data center revenue up 83% to $760 million
  • Visualization revenue up 20% to $281 million
  • Auto-related revenue up 13% to $161 million

In total, Nvidia reported total second-quarter earnings of $1.1 billion – an increase of more than 50 percent from Q2 2017 earnings of $583 million.

Do you think that Nvidia will see a resurgence in cryptocurrency related earnings once the market recovers? Let us know in the comments below.


Images courtesy of ShutterStock

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