- Wu Jihan, former CEO of China's mining machine manufacturer Bitmain, will launch a new startup, Matrix, by the end of July.
- Matrix is a hosting and trading company. It is understood that it was originally hatched in Bitmain, and Bitmain will subsequently become a major customer.
- According to sources, with Bitmain as its main partner, Matrix may become the "largest OTC trading platform in the world" overnight.
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The details of the latest joint venture, Matrix, of the former CEO of Bitmain, Wu Jihan, have not been specifically disclosed.
But four sources close to Bitmain said that Wu Jihan's new encryption service company Matrix will be online for about a month.
It is said that Matrix is in talks with potential customers around the world (except the US), and the company's biggest customer will be bitcoin mining giant Bitmain itself. Suppose Matrix will provide hosting and loan services to Bitmain, and Bitmain, as a miner, will generate a large amount of cryptographic assets while attracting a pool of liquidity for its over-the-counter (OTC) products.
Sources working closely with Asian investors said:
“So, they will become the (largest) OTC and asset management companies in the world overnight. With such liquidity, (low) prices will follow.”
They pointed out that Matrix should have a competitive advantage in the region because the Asian market is “more sensitive to price”.
The news may be surprising, because it was previously believed that the birth of Matrix originated from the rift between Wu Jihan and another co-founder of Bitmain. But now it seems that Bitmain's Beijing staff and resource outflows may be intentional and part of a broader strategic plan. Bitmain Investment Director Cynthia Wu works closely with Matrix.
"The relationship between the two sides is very good," a source close to the key figures pointed out.
They also explained that Bitmain began to establish a trading and custody department internally, and it was not until February of this year that it decided to have the opportunity to divest it into an independent legal entity.
Bitmain did not respond to the request for comment.
According to two sources, it is still unclear what role Wu Jihan will play in Matrix, but he is said to be managing the company as “Chairman”. According to a Chinese media report, Wu Jihan was eventually appointed as the CEO of the project. Wu Jihan is still a director of Bitmain and continues to hold a 20.5% stake in the company, which lost $500 million in the third quarter of 2018.
Wu Jihan and Jenke are the richest people in the encryption industry, all billionaires. However, some sources have suggested that Matrix may be part of the two founder exit strategies.
As for the relationship between Matrix and the Chinese market, China is currently banned from encrypting transactions. It is not clear whether the two will remain in contact. Matrix may have an offshore holding company, but some people suspect that Matrix may eventually gain a monopoly on operations in China as part of a country's desire to impose stricter regulation on China's underground market.
They pointed out: "This is more like an attitude of 'If we can't beat them, how can we guide them?'"
However, regardless of whether Matrix can operate in China, the region will welcome an important new company to compete with internationally established companies such as Coinbase and BitMEX.
One source concluded: "Matrix will make Asia a new focus for over-the-counter trading of encrypted assets."