Bitcoin Group, an Australia-based bitcoin miner, has announced that it has withdrawn its initial public offering (IPO) and Australian Stock Exchange (ASX) listing application, adding that it will continue with its mining activities.

Bitcoin Group announced last month that $5.9 million was the final amount raised in the IPO. However, it now says that it will return IPO subscription application monies to investors.

After months of delays, the announcement is quite disappointing. Citing the key reason for its withdrawal, Bitcoin Group pointed to a requirement of the ASX that required it to procure a working capital report from an independent accounting firm, adding that the report is not specifically required for a listing on the ASX.

Bitcoin Group engaged Grant Thornton to undertake an Independent Expert Report on Working Capital for submission to the ASX. In preparing the working capital report, Grant Thornton was required to factor in the block halving due in July 2016, without regard to the expected increase in bitcoin price.

The company pointed out that the last time when block halving occurred (28 November 2012), the bitcoin price increased in value by 1032% in the proceeding 6 months (from US$12.16 to US$125.58). However, as ASIC prohibited any forecasting on the bitcoin price, it resulted in a report that did not allow for any increase in bitcoin price upon the halving of bitcoin mining rewards.

The company said in a statement:

“ASX rejected this report in the view that the company will not have sufficient working capital beyond September 2017, with the opinion of Grant Thornton provided, based upon:

• blockchain halving occuring in July 2016; and
• the price of bitcoin remaining at $500 during all forecast periods”.

Bitcoin Group said that the Directors plan to proceed with a new offer after block halving to allow time for the bitcoin price to reflect the reduced number of bitcoins being released.

“The Directors consider that it is appropriate to now withdraw from the IPO process and consider proceeding with a new offer after Blockchain halving has occurred and the price of bitcoin responds to the halving, which we expect to occur by September 2016”, the company said.