Digestible news on the latest developments across the fields of Web3, NFTs, blockchain, and metaverse in Greater China and beyond, compiled for you every week by Pandaily.
This week: Bitcoin mining giant Canaan doubles profits despite China’s crypto ban, Animoca Brands bets big during crypto winter, metaverse jobs disappear as hiring slows across global tech companies, and more.
Bitcoin Mining Giant Canaan Doubles Profits Despite China’s Crypto Ban, Shares Up Nearly 1%
Chinese crypto mining rig manufacturer Canaan reported 1.65 billion yuan ($246.7 million) in revenue in the second quarter of this year, up 52.8% year-on-year. Shares of the company went up by 0.77% on Thursday upon the news. Cointelegraph and Forkast first reported the story.
- The company’s net income expanded to 608.9 million yuan, compared with an 245 million yuan net income a year earlier.
- Despite significant growth in profits, Canaan CEO Nangeng Zhang revealed that Q2 was a challenging period for the company. “The COVID-19 containment lockdown in key cities in China also brought severe disruptions to our daily operations and demand for our AI chips,” he noted.
- The company further revealed that it had lowered its product price for spot sales as the Bitcoin price went down during the quarter.
- “Looking ahead to the coming quarters, we see a tougher market environment from the lower Bitcoin price level, overall increased energy price, and various pandemic and geopolitical uncertainties globally, which may all jeopardize the demand and price for our products,” Forkast wrote, citing Canaan’s earnings report.
- Despite headwinds in the global crypto market, Canaan is continuing its expansion in North America by building warehouses, logistics and repair units, while exploring opportunities to expand its mining operations in the region, the CEO said on Thursday in an earnings call. (Cointelegraph, Forkast)
READ MORE:All of our previous articles on Canaan!
Animoca Brands Bets Big During Crypto Winter
The latest slump in digital assets has wiped out $2 trillion from the global crypto market since November. However, Animoca Brands, Asia’s biggest gaming software developer and venture capital firm, is assembling a vast portfolio of 340 gaming, crypto, and social media companies in the hope of reviving the industry. Bloomberg first reported the story.
- According to Yat Siu, the company’s Cofounder and Executive Chairman, the goal of the investments is to help people regain ownership of virtual assets from the hands of companies like Microsoft and Meta.
- The Cofounder further said that the strategy was informed by the crypto crash of 2018, which gave him the opportunity to turn his video game studio into a leading venture capital firm focused on the crypto industry.
- The company’s meteoric rise hinged upon its continued investments in crypto games, such as CryptoKitties, one of the world’s first blockchain games in which virtual cats can be bought and sold with digital currencies.
- Just four years later, Animoca is one of the crypto industry’s most influential investors, with backing from Sequoia Capital and George Soros, a legendary hedge fund manager who is widely considered one of the most successful investors of all time.
- “If people say this is a crypto winter, then 2018 was the crypto ice age,” Siu says. “Now is the time to deploy more capital, not less.”
- Animoca is one of the few companies still investing in the crypto industry. His strategy could severely backfire if this downturn does not play out like 2018’s. (Bloomberg)
Gate.io Group’s Hippo Financial Services Obtains Hong Kong Crypto Custody License
Gate.io’s Hippo Financial Services Limited has been granted a Trust or Company Service Provider (TCSP) Licence to offer virtual asset custodial services in Hong Kong, according to a press release on Monday.
- The TCSP Licence is required for any entity that carries on or wishes to carry on a trust or company service business in Hong Kong.
- “Obtaining the TCSP Licence in Hong Kong enables us to deepen our relationship with global crypto investors as an industry leader. Next, we will be building localized operations to bring our products and services to users in Hong Kong,” said Tom Yang, EVP of Gate.io Group.
- With an initial focus on virtual asset custody services, Hippo FS is dedicating resources towards establishing teams to manage local operations, including the security of its services infrastructure and client’s assets.
- “Establishing a custody business in Hong Kong is a global strategic milestone of Gate.io Group, not only because Hong Kong is the hub for many financial institutions and investors, but more importantly, the industry-leading regulatory regime of Hong Kong provides additional confidence for investors that place assets in Hippo FS’s custody,” according to Dr. Han Lin, Founder and CEO of Gate.io Group.
- Gate.io’s exchange is now based in the Cayman Islands. It left China after its government issued a blanket ban on crypto. (CoinDesk, PRNewswire)
Crypto Exchange Gemini to Offer Staking Support for Investors
Hong Kong-based crypto exchange Gemini announced on Friday that it will offer support for clients based in the US, Singapore and Hong Kong to earn and store staking rewards in their Gemini accounts. CoinDesk first reported the story.
- The firm will support staking MATIC on the Polygon network and will roll out support for digital assets including ETH, AUDIO, SOL and DOT over the next few months.
- The announcement came as crypto firms began to expand their stake offerings ahead of the Ethereum blockchain’s much-anticipated Merge, which will shift the protocol from proof-of-work to a faster, more energy-efficient proof-of-stake model. After years of delay, The Merge is now scheduled to occur on September 15.
- “It’s now more clear than ever that people are interested in staking, especially now that we’re on the cusp of the Ethereum Merge,” a company spokesperson told CoinDesk. “With Ethereum being a staking option for them on Gemini soon and after the Merge, and with there being more liquidity and higher yields, staking is becoming more and more appealing for people.”
- Staking is a process by which crypto owners lock up their assets for a set period of time to help support the operation of a blockchain. In return for staking the crypto, the owner earns more cryptocurrency. Many blockchains use a proof of stake consensus mechanism.
- Staking is only possible via the proof-of-stake consensus mechanism, which is a specific method used by certain blockchains to select honest participants and verify new blocks of data being added to the network. (CoinDesk)
Metaverse Jobs Disappear as Hiring Slows in Global Tech Companies
New monthly job postings across all industries with ‘metaverse’ in the title declined 81% between April and June, Bloomberg reported, citing data from Revelio Labs, a workforce research company.
- The decline comes after metaverse-related jobs surged in the months following Facebook’s rebranding as Meta. The drop-off also coincides with a broader cool down across the tech sector, which has led to hiring freezes and layoffs.
- Meta slowed hiring in May, but said it has picked up speed in recent months. “After temporarily pausing hiring for certain roles at the company, we’re excited to resume it again for some of our highest priority areas,” said Andrea Beasley, the company’s spokeswoman.
- Last month, Facebook parent Meta reported a steeper-than-expected drop in revenue, missed on earnings, and issued a surprisingly weak forecast, pointing to a second consecutive decline in year-over-year sales. Zuckerberg said on Meta’s July 27 earnings call that he was “slowing the pace” of long-term investments due to the revenue shortfall.
- Meta shares have lost about half their value since the beginning of the year, underscoring investor concern about the health of the company’s core online advertising business.
- Meanwhile, Apple, Meta’s emerging rival in the Web3 space, said July 28 that it would be “more deliberate” in its recruitment. (Bloomberg, CNBC)
FTX Revenue Grew 1,000% During Crypto Craze
Crypto exchange FTX took revenue from below $90 million in 2020 to more than $1 billion last year as cryptocurrencies hit an all-time high. CNBC first reported the story.
- FTX rode the crypto craze to a billion dollars in revenue last year while expanding its global footprint through a flurry of acquisitions. In June, the company announced that it had entered into an agreement to purchase Canadian crypto platform Bitvo and was reportedly considering purchasing Robinhood.
- The company has reportedly also set new fundraising targets, matching that of a January funding round in which the firm closed on a $400 million round, bringing it a valuation of $32 billion.
- The crypto exchange’s revenue increased more than 1,000% from $89 million to $1.02 billion in 2021, according to audited financials seen by CNBC. (CNBC)
That’s it for this week’s newsletter – thanks for reading! As always, we welcome any feedback on how to make this newsletter better. Write to us at [email protected]. See you again next week!