Antalpha IPO Interpretation: A Key Move in Bitmain's Financial Chess Game?

Author: Frank, PANews

Recently, a fintech company named Antalpha submitted its prospectus to NASDAQ, planning to go public with the code "ANTA". Antalpha is a financial solution provider in the Bitcoin mining sector; however, the close ties disclosed in its prospectus with mining giant Bitmain, as well as the intricate associations with Bitmain co-founder Jihan Wu, make this IPO full of intriguing implications. Beyond the surface of the fintech company going public, is this a crucial step in the expansion of Bitmain's financial landscape?

The "financial lifeblood" behind Bitcoin mining

Antalpha was founded in 2022, and there is little information about itself on its official website, only highlighting its strategic partnership with Bitmain. According to its prospectus and public information, Antalpha's core business is to provide financing, technology, and risk management solutions for digital asset institutions, especially Bitcoin miners. Its goal is to help miners scale their operations and better manage the impact of Bitcoin price volatility by providing financing solutions, such as supporting miners' "HODLing" strategies.

Antalpha's core products and services are primarily realized through its technology platform Antalpha Prime. This platform allows clients to initiate and manage their digital asset loans, while monitoring collateral positions in near real-time. Its main sources of revenue include two aspects.

First is supply chain financing, which is reflected as "technical financing fees" and is the main revenue pillar for Antalpha. Specifically, it includes: mining machine loans, providing financing for the purchase of Bitcoin mining machines (usually pre-owned machines purchased from Bitmain) and using the purchased machines as collateral. Hashrate loans: providing financing for operational costs related to mining (such as hosting fees), with collateral typically being the mined Bitcoin. According to data disclosed by Antalpha, as of December 31, 2024, a total of 2.8 billion USD in loans has been facilitated, of which approximately 97% of supply chain loan customers' loans are BTC-backed.

In addition to directly providing financing loans, another major business of Antalpha is its Bitcoin loan matching service: this part of the revenue is reflected as "technical platform fees". Antalpha offers Bitcoin margin loan services to its non-US clients through the Antalpha Prime platform. It is worth noting that the funding for these loans has historically been primarily provided by its affiliate Northstar. In this model, Antalpha acts as a technology and service provider, earning platform fees and not bearing the credit risk of these loans.

Financial data shows that Antalpha's total revenue reached $47.45 million in the most recent fiscal year (ending December 31, 2024), a year-on-year increase of 321%. Among this, technology financing fees amounted to $38.7 million, a year-on-year increase of 274%; technology platform fees reached $8.8 million, soaring 859% year-on-year. The company also successfully turned a profit, achieving a net profit of $4.4 million, compared to a net loss of $6.6 million in the previous fiscal year.

In terms of loan scale, as of December 31, 2024, Antalpha's total loan book size reached $1.6 billion. Among them, the supply chain loan portfolio (mining machine loans and computing power loans) issued by Antalpha grew from $344 million at the end of 2023 to $428.9 million, a year-on-year increase of 25%. Meanwhile, the Bitcoin loan size serving Northstar surged from $220.8 million at the end of 2023 to $1.1987 billion, a staggering year-on-year growth of 443%. Geographically, its loan business is highly concentrated in Asia; by the end of 2024, 77.4% of the loans (approximately $1.26 billion) flowed to Asian clients.

Bitmain's "financial special forces"

Antalpha does not shy away from its close relationship with Bitmain in its prospectus, referring to itself as "Bitmain's primary lending partner." The two parties even signed a memorandum of understanding, stipulating that Bitmain will continue to use Antalpha as its financing partner, mutually recommending clients to each other, and that as long as Antalpha provides competitive terms, Bitmain grants Antalpha priority acquisition rights to serve its financing clients.

This preferential purchase right means that Antalpha can have priority access to Bitmain's vast customer base for purchasing mining machines, significantly reducing customer acquisition costs and ensuring a continuous flow of business. The prospectus also mentions that Antalpha works closely with Bitmain at all levels, from sales to operations to senior management, and is an indispensable part of Bitmain's sales and business initiation processes.

However, the connection between Antalpha and Bitmain goes beyond just business cooperation. A deeper association is with Bitmain's co-founder, Jihan Wu.

The prospectus introduces the complex relationship between Antalpha and Northstar. Historically, Northstar provided almost all the funding for loans issued to Antalpha and offered bitcoin margin loans to Antalpha's non-U.S. clients through the AntalphaPrime platform. The key point is that Antalpha and Northstar were originally sister companies, both under a parent company ultimately controlled by Jankuan.

After the "2024 Reorganization", Antalpha was divested from it and transferred to the current listed entity Antalpha Platform Holdings. Subsequently, the original parent company disposed of all its equity in Northstar. Currently, Northstar is owned by an irrevocable trust, with the Zhan Ke group as the trustee and beneficiary, managed by a professional trust company. The prospectus emphasizes that the Zhan Ke group does not participate in the operation of Northstar.

Despite the reorganization, Northstar remains an important capital provider for Antalpha's Bitcoin lending services. As the ultimate beneficiary of the Northstar Trust, Zhang Ketu's economic interests are still indirectly but significantly linked to Northstar's business performance and even to the scale of Antalpha's operations.

Therefore, although the Antalpha platform holding company may be legally separated from the direct control of Janke Tuan, from the perspectives of business logic, capital flow, and strategic synergy, Antalpha can still be regarded as an important part of Bitmain's financial landscape. It is more like a "financial special forces" that has been carefully designed and carved out, focusing on providing financial ammunition for Bitmain's mining machine empire.

Bitmain's strategic pieces in the post-halving era

The deep strategic significance of Antalpha's listing is closely related to the industry environment that Bitmain will face after the Bitcoin halving in 2024 and its own strategic adjustments.

The Bitcoin halving in April 2024 has arrived as expected, compressing miners' block rewards and posing a direct challenge to the profitability of the entire mining industry. For Bitmain, this means that market demand for its products will place greater emphasis on high efficiency and low power consumption. Over the past year, Bitmain has accelerated the launch of the new generation of high-efficiency mining machines represented by the Antminer S21 series to solidify its leadership position in the mining hardware sector. Procurement agreements for the S21 series mining machines have been signed with partners such as BitFuFu and Hut8. By continuing to deepen cooperation with large mining farms, Bitmain is striving to secure large orders for its latest mining machines.

On one hand, after the halving, the mining industry has become increasingly competitive, and miners must enhance the performance of their mining machines to maintain profits, which has significantly raised operating costs. This poses a potential business growth risk for Bitmain in the future. On the other hand, as the price of Bitcoin rises, more external companies, including publicly listed companies, are also entering the mining industry, bringing new opportunities for Bitmain. However, these opportunities also depend on fluctuations in Bitcoin's price. Therefore, Antalpha provides loan support for Bitmain's customers to purchase new generation mining machines like the S21. This not only directly promotes Bitmain's sales performance but also indirectly helps the mining community navigate the capital challenges arising from equipment iterations.

Antalpha's IPO has also attracted a number of high-profile investors, with Tether expressing interest in subscribing for $25 million of Antalpha's common stock at the issue price in the IPO. At $12 per share at the midpoint of the offering price range, the investment will account for approximately 54.1% of the total number of shares issued in the underlying offering, equivalent to approximately 2.08 million shares. According to the prospectus, Antalpha's loan business is usually settled in USDT, and this investment is another move by Tether's multi-line layout, but the prospectus also states that this intention is "not a binding purchase agreement or commitment".

In addition, Antalpha mentioned in its prospectus plans to explore financing solutions for GPUs needed in the AI field. For Bitmain, Antalpha's expansion capabilities also serve as a barbell strategy to mitigate the risks of uncertainty in the cryptocurrency industry. If Antalpha can succeed in new areas such as AI GPU financing, its own growth will indirectly enhance the resilience of Bitmain's entire ecosystem.

Therefore, Antalpha's IPO is not just a simple listing of a fintech company, but rather a key step for Bitmain in the post-halving era to consolidate its mining empire, optimize its financial tools, and reserve strength for its long-term strategic development.