Ultimate Tactics Used by Binance, Huobi and OKEx in the Bear Market
After miners, crypto exchange has also become a victim of the bearish cryptocurrency market. The top China-based exchanges: Binance, OKCoin/OKEx, and Huobi Global are investigating their own tactics to resist the crypto crash.
In the previous year, the leading crypto exchanges get anxiety by seeing their revenue declined significantly at a rapid speed. In this condition, embracing traditional capital has become one of the self-saving strategies to get some “new blood”.
Of late, Star Xu, founder of OKEx has purchased 60.49% stake in LEAP Holdings Group Ltd, (a listed company mainly engaged in construction engineering) according to shareholding disclosure shown on Hong Kong Stock Exchange (HKEx). OKEx is seeking a backdoor listing by purchasing the majority stake of a Hong Kong-listed company.
Xu has bought about 3.2 billion shares of the company at the price of HK$0.152 (around US$0.02) per share, which means this acquisition costs HK$484 million (approximately US$62 million) in total. The exchange is likely to enter Hong Kong’s stock market soon ahead of IPO request approval of major bitcoin mining rig makers.
Huobi, another leading crypto exchange originated from Mainland China, took a similar path last August. The company acquired 73.73 percent of a listed company named Pantronics Holdings Ltd., costing around $70 million to become its largest shareholder.
Some sources indicated that Crypto exchanges are more likely to opt for a reverse-merger path route to become public listed companies and trade their stocks, rather than going for a conventional IPO, which is quite lengthy and complex.
As the cryptocurrency trading business is shrinking in the bear market, many crypto exchanges are forced to lay off their staffs and downsize their operation. In this crypto winter, OKEx and Huobi turned to the traditional capital market for help while Binance is undergoing some adjustment to its own business strategy.
Different from its rivals that aiming to go public, Binance always believes that the decentralized exchanges will be the mainstream of the digital assets trading market in the future.
The exchange is developing is own public blockchain Binance Chain (BNB). It was reported that BNB many generate a new block in every second and it enables real-time trading. Binance’s decentralized exchange Binance DEX will also operate upon BNB.
Nevertheless, Binance CEO Changpeng Zhao (CZ) indicated that it still takes several years for decentralized exchanges to become the mainstream based on the current performance of the public blockchain.
On January 22, CZ disclosed at the Binance conference that the testnet of BNB will be launched in two or three weeks.
Binance has also launched its OTC trading platform on Jan. 23. Firm representatives claimed that the platform supports over 80 kinds of digital assets listed on Binance. However, Binance’s OTC trading services are only available for big players whose account has completed the “Level 2” KYC verification and trade over 20 BTC worth of value at a time.