CoinDesk reports:
Genesis Digital Assets (GDA) is the latest mining company eyeing an IPO.
According to Bloomberg on July 2, Genesis Digital Assets (GDA), a major Bitcoin mining firm, is planning its initial public offering in the United States.
Internal documents indicate GDA was valued at $5.5 billion as of its latest financing round in April 2022. Notably, bankrupt FTX Exchange’s sister trading firm, Alameda Research, invested $1.15 billion in this round.
Anonymous sources familiar with the matter told Bloomberg that the company is currently seeking advisory guidance and intends to launch a pre-IPO financing round in the coming weeks.
Operating over 20 data centers across four continents, GDA boasts a total power capacity exceeding 500 megawatts.
Recently expanding operations, GDA announced in April the construction of a 36-megawatt power plant in Texas, boosting its total hash rate by 1 exahash per second (EH/s).
In May, GDA established a mining center in Argentina.
A boon for FTX creditors?
While details on the rumored IPO are scarce, the issuance could be a windfall for FTX creditors. It is anticipated that GDA shareholders will sell a portion of their stakes to the public.
FTX filed for bankruptcy in November 2022, uncovering one of the largest fraud cases in CeFi history. Reports revealed billions of client assets were misappropriated, with a significant portion flowing into Alameda Research, heavily impacted by Terra’s collapse in May of the same year.
During the trial of FTX founder and CEO Sam Bankman Fried in October 2023, accounting professor Peter Easton, hired by the Justice Department, testified that Alameda may have used deposits from FTX clients to purchase shares in GDA.
Last week, FTX received court approval to solicit creditor votes on a proposed liquidation plan that would reimburse clients in cash based on their holdings at the time of the exchange’s collapse. Criticism arose due to the plan’s failure to adjust customer balances in response to the rise in cryptocurrency prices since the company’s closure.
Bitcoin miner income declines
Following Bitcoin’s fourth halving in April, many miners face significant financial challenges as the new issuance rate decreases by 50%, reducing rewards to 3.125 bitcoins per new block, down from the previous 6.25 bitcoins.
Data from blockchain.com shows the halving event impacting miner income. Peak hash rate reached 650 exahashes per second (EH/s) on halving day but subsequently dropped 15% to 552 EH/s, indicating many inefficient miners were forced offline. Hash rate measures the combined computational power miners use to compete in verifying Bitcoin transactions.
According to on-chain analytics platform CryptoQuant, miner reserves dropped from 1.84 million BTC a year ago to 1.81 million BTC. This marks the lowest level since July 2021 and the largest decline in over a decade, suggesting many miners are tapping into their savings to sustain operations.
Simultaneously, transaction fees on the Bitcoin network have also significantly decreased, further impacting miner income. In July, the average transaction fee (7-day moving average) fell to $2.09, down from levels ranging between $4 to $20 for most of the past year.
