What Is the New Startup All About?
Wu Jihan has gathered several former employees from Bitmain to create a new cryptocurrency financial services startup called Matrixport. The platform is designed for over-the-counter (OTC) trading as well as lending and custody of digital currencies. The company intends to leverage the recent hike in Bitcoin prices, which have grown by 3x year-to-date.
Matrixport spun off from Bitmain in January when the year-long crypto winter created a major cash-crunch issue for the crypto mining rig producer. According to Matrixport CEO Ge Yuesheng, the company has a staff of 100 people, several of whom were laid off from Bitmain. Several global venture capital firms are backing the company, including Bitmain itself. The venture was launched on Monday, and it will be providing more details about its funding at a later date.
The young CEO of Matrixport said that they are “closely tied to Bitmain by our origin.” He holds Bitmain shares too and says that the two companies are partners instead of competitors because they operate in different businesses. Bitmain hasn’t commented on Matrixport’s connection yet.
What Will Matrixport Aim to Be?
The company wants to emerge as a challenge to Genesis Global Trading Inc. and BitGo Inc. to develop financial services for professional cryptocurrency investors and traders. Matrixport intends to leverage its Bitmain connection to target Chinese miners, who are amongst the largest in the world. However, it is incorporated outside of mainland China to avoid the authorities’ ban on digital currency trading.
Jihan Wu is a crypto billionaire who co-founded Bitmain but recently stepped down from his active executive role in the company. According to Bloomberg, after two failed attempts at launching an IPO in the Hong Kong stock exchange, Bitmain is planning to go public in the US. It wants to raise between $300 million and $500 million (a far cry from its $1 billion IPO planned for Hong Kong) from the US share sale later this year. Wu will also be benefitted because of the sale.
Ge has worked previously with Wu. In 2012, he was interning at a 4% stake in the company. He was earlier involved with the investment unit at Bitmain, which included funding from Circle, a Boston-based wallet operator, and exchange.