Ebang Confirms Crypto Exchange Launch in Q1 2021
Top Chinese blockchain technology company with a strong application-specific integrated circuit (ASIC) chip design capability has announced its plan to start the public testing of its cryptocurrency exchange ahead of its official launch in the first quarter of 2021.
Ebang International’s announcement comes after making several moves to establish its base in the digital service sector. The leading Bitcoin mining machine producer‘s venture into running a digital asset financial service platform is to expand into the upstream and the downstream of blockchain and cryptocurrency industry value chains, it says.
The China-based holding company filed for a $100 million initial public offering IPO with the Securities and Exchange Commission in April 2020 as it seeks to become a globally prominent blockchain company and went live on the Nasdaq on Friday, June 26.
Following the confirmation that it completed the internal testing of its cryptocurrency exchange, Ebang made the list of the five top stock gainers on Thursday, the last trading day of 2020.
Ebang’s crypto exchange passes preparation stages
The growth strategy of the company to build a digital asset financial service platform has been in the making for quite some time. In October, it established a wholly-owned subsidiary in Australia even though there was no guarantee that it will get the requisite regulatory approvals and licenses to operate its proposed business in Australia in a timely manner or on commercially reasonable terms, or at all.
It also entered into an Expression of Interest Tender Letter to acquire the 100% shares in a licensed New Zealand-based financial company that offers wholesale and generic financial broker, and wealth management services as well as established a wholly-owned subsidiary in Canada. These efforts, geared at a global expansion drive, underscores the company’s eagerness to ensure the crypto exchange succeeds.
Why launch an exchange
“The completion of the internal testing of our cryptocurrency exchange is another step forward in expanding our blockchain financial services business,” its CEO, Dong Hu, says in a public statement, noting that they still plan to explore other business opportunities in the blockchain and cryptocurrency industry such as mining farms and cryptocurrency mining though.
Earlier, Ebang had planned to launch the exchange this year after expanding into the newer business of helping clients manage data centers. Its Chief Financial Officer Chen Lei had said in an interview at the time that the launch of the crypto exchange could see the company’s revenue almost double to $200 million.
The exchange is to help the company counter the wild volatility of the world’s largest cryptocurrency, Bitcoin, whose significant drop in its prices could mean bad business for mining-equipment makers like itself.
A managed volatility due to Bitcoin harsh price drops is expected to save Ebang which had a reversal in its performance from 2018 to 2019 since about 82% of its 2019 revenue came from mining machines.
The value of the company’s Bitcoin mining machines being directly correlated to the price of Bitcoin shows a significant weakness in its operations hence the decision to choose a supplementary approach to reduce the reliance on Bitcoin prices. going the crypto exchange way puts Ebang on a different track from rivals like Bitmain Technologies Ltd. and Canaan Inc. which look to make chips in the adjacent field of artificial intelligence.