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Coinbase (NASDAQ: COIN) recently went public through a direct listing and brought cryptocurrency further into the mainstream. While the stock hasn’t performed well since the first week of trading, the market’s appetite for crypto has yet to be satisfied.
Cipher Mining Technologies isn’t as ubiquitous as Coinbase, but it still has game-changing potential. Most Bitcoin mining is done in China, which is off limits to investors. You can donate your computing power to a mining company and reap benefits from any BTC harvested, but you can’t invest in the shares of any miners.
Cipher Mining will provide a way for investors to get access to the profits of a crypto miner without sacrificing their tech to the operation. Learn how to buy Cipher IPO stock now.
When is the Cipher IPO Date?
In March 2021, Cipher announced plans to enter the public markets via a SPAC deal. SPAC stands for Special Purpose Acquisition Company, and firms like this are often called ‘blank check companies’ since the sole purpose for existing is to purchase a private company and bring them public. SPAC deals avoid some of the regulatory headaches that most IPOs contend with, but still have their downsides.
Cipher will merge with the Good Works Acquisition Company (NASDAQ: GWAC) in a deal rumored to be worth over $2 billion. Once finished, the company will be known as Cipher Mining Inc. and trade on the Nasdaq under the ticker CIFR. No formal IPO date has been announced yet, but analysts are expecting a debut sometime before the end of Q2 in 2021.
SPAC deals have come under some scrutiny after exploding in early 2021. SPACs are advantageous to insiders since they come to market faster and target companies won’t be scrutinized by underwriters.
Unlike traditional IPOs which only allow investors with significant capital to join pre-IPO, SPACs are open to retail and sophisticated investors alike. However, unlike traditional IPOs, retail investors are stuck if they don’t like the acquisition the SPAC makes and are unable to receive warrants for more share purchases in the future.
Cipher Financial History
Cipher Mining Technologies is an offshoot of BitFury Group, which specializes in producing cryptocurrency mining hardware. Established in 2011, BitFury Group has unique expertise in the space thanks to their decade of experience in producing mining equipment. In just under 10 years, the company has mined over 600,000 Bitcoins.
The proposed merger between Cipher and blank check company Good Works Acquisition is expected to bring a total enterprise valuation of $2 billion. The agreement was reached in early March, however no timeline has been given for when the newly-minted organization will begin trading shares.
Cipher has 2 strong tailwinds:
- Rapid adoption of Bitcoin and other cryptocurrencies into mainstream finance
- Lack of reputable mining companies outside of China
Unlike the last crypto bull run, the utility of cryptocurrencies today far surpasses what was still infancy back in 2017. Bitcoin and Ethereum are both assets with market caps comparable to the largest publicly-traded firms in the world. Crypto has reached the mainstream, which makes it a great time for a mining company to come public.
Cipher Mining wants to make itself the “champion of U.S. cryptocurrency mining” and the competition isn’t exactly fierce. An overwhelming majority of Bitcoins are mined in China ,which presents legal and regulatory hurdles for investors who wish to profit from miners.
By creating a large scale mining firm in the U.S., Cipher will give investors access to a domestic company heavily involved in Bitcoin mining. The company plans to bring its U.S.-based data centers online sometime before the end of 2021, reaching full service by Q2 2022.
How to Buy Cipher IPO Stock
Looking to invest in Cipher’s IPO? If you’re a retail investor, you’re in luck — SPACs are much more accessible than traditional IPOs with 6-figure starting positions as the norm.
Here’s how to get started:
Step 1: Pick a brokerage.
The first step is always the same. You’ll need a broker to act as custodian for your shares. The criteria for selecting a broker depends on the type of trading you want to do. Are you an active day trader? Then you’ll likely want a high-powered broker with charting tools like TD Ameritrade or Interactive Brokers. But if you’re simply looking to buy and hold, you’ll be fine with the offerings from discount brokers like Vanguard or Robinhood.
Step 2: Decide how many shares you want.
SPAC IPOs usually have an initial price of $10 per share, although there are occasional exceptions. The black check company Good Works Acquisition Company (NASDAQ: GWAC) is currently trading around $10, so let’s use that as a starting point.
How much are you willing to risk on a cryptocurrency mining IPO? Remember that new issues are risky and Bitcoin is a highly volatile asset, so there’s a double whammy of risk at play here. Position your trade accordingly.
Step 3: Choose your order type.
Unlike a traditional IPO or direct listing, you likely won’t feel pressure to acquire your shares of Cipher quickly. Since speed isn’t a factor, we can utilize limit orders to get a price as close as possible to our ideal target. Use the framework you outlined when sizing your position and prepare your limit order.
Step 4: Execute your trade.
Once your account is funded and your order entered, you can execute your trade and purchase the shares. Find a good entry point by using technical signals like support and moving averages and make your move. Once the trade is finalized, the shares will be in your account.
Cipher Restrictions for Retail Investors
Since Cipher is going public via a SPAC, the normal restrictions that keep retail investors from getting a piece of the pie aren’t in place. Minimum purchase amounts for SPAC deals are easier for retail investors to manage than the hefty sums required for participation in a traditional IPO or direct listing.
Check with your broker to see if any restrictions are in place for IPOs, specifically SPACs if you’re interested in Cipher.
There’s no pre-IPO purchase to be made since the company is going public via SPAC. But while the company will soon trade on the NASDAQ under the ticker CIFR, you can purchase shares of the GWAC right now.
GWAC shares bounced higher in the first week of March when the proposed deal was announced but have now settled back down around the traditional $10 starting price. The risk here is that if the proposed deal should fall through, shares of GWAC will likely plummet.
Cipher Brings BTC Mining to the United States
It’s never been easier to buy, sell or hold cryptocurrencies in the U.S. Not only that, but mainstream acceptance is rising as major American firms like PayPal, Square and Tesla have begun integrating cryptocurrency into their balance sheets and products. But one area the U.S. still lacks agency is in the mining space.
Ciper Mining could become the centerpiece of Bitcoin mining in the U.S., with a massive complex of data centers and the backing of a crypto heavyweight like BitFury. U.S. investors will soon be able to reap the benefits of cryptocurrency mining without sacrificing their computing power to actually mine coins.
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