Bitcoin mining equipment manufacturer, Ebang plans to launch a cryptocurrency exchange in the first quarter of 2021. The move is part of the Hangzhou-based company’s strategy to diversify its revenue streams beyond a sector that is extremely competitive and tends to boom and bust with Bitcoin prices.
Additionally, the move comes a little over three months after the US-listed company set up subsidiaries in Australia, paving the way for it to enter the digital asset trading business. In pursuit of a global digital asset platform, it expanded into Singapore for its planned offshore exchange for cryptocurrency.
Dong Hu, Chairman and CEO of the Company, commented: “The completion of the internal testing of our cryptocurrency exchange is another step forward in expanding our blockchain financial services business. Meanwhile, we will also explore other business opportunities in the blockchain and cryptocurrency industry such as establishing mining farms and cryptocurrency mining to optimize the structure of our offerings in the blockchain industry value chain.”
Ebang, which raised $100 million in June through a Nasdaq IPO, has been exploring opportunities outside the mining space in an effort to reduce its reliance on sales of bitcoin rigs that are vulnerable to cryptocurrency price fluctuations.
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Moreover, the Hangzhou-based maker of Bitcoin mining rigs set up another subsidiary in Canada in September and acquired a licensed New Zealand broker and wealth management firm in October.
Ebang CFO, Chen Lei said in an interview that the company’s revenue could almost double to $200 million with the launch of the crypto exchange. In 2019, the firm generated $109 million in revenue, down from nearly $300 million in the year earlier. However, Ebang reported net losses in both 2018 and 2019 and incurred $6.96 million in operational loss for the first half of 2020.
The abrupt upside movement of the bitcoin price, which has made over 300 percent year-to-date gain, will pretty much mean solid business for mining-equipment makers like Ebang as miners are making a lot of money confirming blocks.