The ongoing crypto asset bull market has spurred Chinese players to invest heavily in bitcoin and blockchain projects.
According to a March 9 Reuters report, Chinese cryptocurrency mining hardware producer Ebang conducted two fundraising rounds in February alone, raking in $170 million, even after a previous offering in November, which followed its Nasdaq listing in June.
“Ebang’s growth story is very attractive to institutional investors,” said Guo Yi, COO of Univest Securities. “Fundraising by all industry players is getting busier thanks to the Bitcoin bull.”
Furthermore, waste recycling firm Code Chain New Continent also raised $25 million last month to start mining Bitcoin. The company’s co-CEO David Feng said that the firm ordered 10,000 mining machines because Bitcoin’s price gives the firm “a unique opportunity to establish mining operations.”
The number of high-quality blockchain and crypto asset projects in China is partly attributable to initiatives by local giants such as insurance firm Ping An and fintech giant Ant Financial, which have had a big impact, according to Hong Kong-based blockchain venture capital firm Kenetic Capital’s managing partner, Jehan Chu. He told Reuters that with the current climate in the local crypto industry:
“Competition is white-hot and filled with sharp elbows… Every good-quality funding round is oversubscribed within a week of it being announced.”
It’s not just for Chinese firms, though. Following top U.S. cryptocurrency exchange Coinbase’s announcement in late January that it would go public through a direct listing of Class A shares instead of an IPO, its stock is trading on the private markets at prices that would give CEO Brian Armstrong’s firm a $90 billion valuation, according to Bloomberg. And at the end of last month its San Francisco-based competitor, Kraken, announced a fundraising round that would at least double its valuation to $10 billion.
Jiang Changhao, the co-founder and chief technology officer of Chinese crypto custodian Cobo, said:
“Everyone can feel this euphoric atmosphere in the market, and Coinbase’s listing would lift the mood further… The market is bullish and our business is growing very, very rapidly.”