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Chinese Crypto Mining Giant Ebang to Launch Offshore Crypto Exchange

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Chinese Crypto

Ebang, one of the leading cryptocurrency mining hardware manufacturers in China, is planning to open an offshore cryptocurrency exchange.

Ebang Set to Launch a Digital Asset Exchange

During an interview with Bloomberg BBN, CFO Chen Lei confirmed that the company is set to launch a digital asset exchange. This is Ebang’s attempt to expand its business beyond the cryptocurrency mining sector.

The Bitcoin mining rigs manufacturer, based in Hangzhou, revealed that it expects revenue growth of roughly 40% this year after it expands into the new business of helping customers manage their datacenters. The CFO, Lei, added that the revenue could double to nearly $200 million in 2020 after they launch their cryptocurrency exchange. If that does not happen, then Ebang is expected to hit that mark by 2022, Lei added.Actual Pros and Cons for Cryptobull

Shares of the company plunged by over 4% on Friday after it debuted in the U.S stock exchange following its $100 million IPO. The company plans to use the IPO funds to develop new models of mining machines and expand its business beyond China. Part of its plans is to launch and operate a regulatory-compliant crypto exchange outside China. Lei expects the exchange to attract 10% of all the transaction fees of cryptocurrency trading.

Ebang Crypto Exchange

The new exchange will help Ebang counter the effects of the wild volatility of Bitcoin, which remains the leading and largest cryptocurrency. The price of BTC has been trading between the $5,000 and $10,000 mark since the start of the year. Although cryptocurrency trading is profitable in both the bull and bear markets, a significant plunge in Bitcoin prices will lead to bad business for mining hardware manufacturers like Ebang. In 2019, Ebang recorded $109 million in revenue, which is just a third of the total sales recorded in 2018, according to the company’s prospectus that discussed the net losses in 2018 and 2019.How to Trade on Cryptobull

The larger companies in the space like Bitmain Technologies and Canaan Inc. are focused on manufacturing chips in the AI sector as a way to reduce their reliance on Bitcoin and its volatile price action. However, they have had mixed success so far.

Ebang, founded in 2010 by Hu Dong, has decided to go deeper into the cryptocurrency space. The company will now be providing services that help clients host and maintain their machines at data centers. Ebang is looking to apply for cryptocurrency trading licenses in jurisdictions like Singapore and the United States. They could also consider purchasing an existing cryptocurrency exchange in those countries, Lei added.

Ebang is listing on the NASDAQ stock market at a time when the tension between Beijing and Washington was high. The tension between the two countries is hindering Chinese companies’ access to U.S. capital markets following the accounting scandal revolving around Luckin Coffee Inc., one of the leading startups in the country.BitMEX to Launch

According to Lei, listing on NASDAQ is a win for Ebang’s brand as it aims to attract more customers outside China, including markets like the United States. At the moment, over 90% of their sales are coming from China, and most of the remaining are from the rest of Asia. With the launch of its crypto exchange, Ebang is looking to become a global brand in the cryptocurrency space.