Chinese companies that are not related to cryptocurrencies are investing in Bitcoin mining. They have made good profits on their investments in this activity.
One of the key players in the cryptocurrency market is precisely China. For that reason, a growing number of Chinese companies that are not related to them are investing in Bitcoin mining.
The current bullish run for Bitcoin seems to have prompted these companies to invest large amounts of money in Bitcoin mining.
Some examples are US-listed Chinese companies offering baked goods and tea, emergency rescue, and online lotteries. They have ventured into Bitcoin mining in recent months to capitalize on the current bullish run.
They are only trying to seize the short-term opportunity as they are well-positioned to rapidly expand the mining industry.
“These companies have connections with Chinese Bitcoin mining companies, local hosting mining sites, and state power companies. That situation offers them an advantage over their competitors,” said Ethan Vera, CEO of Bitcoin mining company Luxor.
The executive added that “some of the companies partially belong to the Chinese government. For that reason, they could obtain permits to operate in areas rich in water or economic offers, jointly with state electricity companies “.
Chinese Companies Are Turning To Cryptocurrency Mining
Shenzhen-based online sports Lottery Company 500.com has signed contracts with State Grid Corporation of China. This state power company will allow them to enjoy discounted electricity for their data centers.
Yulong Liu is the CEO of Babel Finance, one of the largest cryptocurrency lenders in China. This executive recently said that “500.com has been quietly developing its Bitcoins mining business for several years.”
He noted that “the lottery company seems to be redoubling its efforts to do Bitcoin mining as Bitcoin has the largest bullish run in history.” Likewise, he said that “adding Bitcoin mining to the businesses of these companies is beneficial. This can significantly increase their multiplication of qualifications.”
A Growing Number of Companies Invest in Bitcoin
Shares in The9, the Nasdaq-listed Chinese online gaming company, have risen by more than 750% since the beginning of the year. That has happened since they announced in January that they would invest in cryptocurrencies.
Sino-Global Shipping, an international shipping company, also announced that it was investing in Bitcoin mining. They earned more than 300% of their share price on February 3rd.
Similarly, SOS, a Chinese emergency services company, has earned more than 300% on its share price since January.
Urban Tea Inc, a Chinese bakery and specialty retailer, has also soared by more than 200% since January. In that month, they switched to Bitcoin mining.
According to Urban Tea CEO Yi Long, “Blockchain technology and cryptocurrencies are gaining widespread popularity. Therefore, they are ready to become the mainstream.”
A steady rise of Bitcoin could drive mining company stocks higher. However, a decline could affect many of these companies if they are not financially sound.
Lingxiao Yang is the COO of Crypto Hedge Fund Trade Terminal. He noted that “the listing on US stock exchanges also contributes to the rapid growth in the mining operations of these companies.”
In conclusion, companies like 500.com could confirm the leadership of the Bitcoin mining industry in China.
By Willmen Blanco
