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Digital currencies

Cryptocurrency exchange Huobi brings in partners to launch new digital trading platforms amid market slump

PUBLISHED : Thursday, 16 August, 2018, 9:02pm
UPDATED : Thursday, 16 August, 2018, 10:18pm

Huobi Group, operator of the world’s third largest cryptocurrency exchange by daily trading volume, has chosen five partners to open their own platforms through its Huobi Cloud in new markets even as the world’s major digital currencies are caught in a slump.

“Together with Huobi Cloud’s corporate partners, we can offer a lower barrier for emerging economies to enter and participate in the burgeoning blockchain ecosystem,” David Chen, a senior business director at Huobi, said in a statement on Thursday.

The company said it selected Yatai International Holding Group, Vnesheconombank, Chi Fu Group, Asia International Finance Holdings and Dbank Group to each set up a new cryptocurrency exchange in the Philippines, Russia, Taiwan, Indonesia and Canada, respectively.

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Huobi Cloud, which was introduced last month, enables users to build their own Huobi-like digital currency trading platforms, which include wallet and asset-management clearing functions, according to the company.

Teaming up with new partners to establish new exchanges through Huobi Cloud would enable the company to accumulate more user data for its operations, according to analysts.

Founded in 2013, Huobi currently processes the trading of more than 190 cryptocurrency pairs. A trading pair represents a trade between one type of cryptocurrency and another.

The company moved its headquarters in October to Singapore from Beijing, following the Chinese government’s crackdown last year on all cryptocurrency exchanges and initial coin offerings.

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Its strategy to support the establishment of new cryptocurrency exchanges in more countries shows confidence in the market, despite the recent tumble taken by almost every digital currency.

On Tuesday, the total market capitalisation of cryptocurrencies sank to US$192 billion from a peak of US$835 billion in January, with bitcoin – the largest digital currency – falling 54 per cent this year and ether down about 60 per cent, according to Coinmarketcap.com.

The interest in new cryptocurrency exchanges may prove to be tepid, according to one analyst.

“When the crypto market is going through a large setback, there will surely be less people interested in trading virtual currencies,” said Katt Gu, an adviser for Strategic Coin, a US-based cryptocurrency market research firm.

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The number of visits to cryptocurrency exchanges have already decreased alongside the drop in value of bitcoin, which sank below US$6,000 on Tuesday.

Total visits to Huobi reached 3 million last month, down from nearly 25 million in February this year, according to Similarweb, an online traffic analysis platform.

Binance, which is the world’s biggest cryptocurrency exchange, saw visits decline to less than 50 million in July from more than 75 million in February. In response to the Chinese crackdown last year, Binance moved its headquarters to the island-state of Malta in southern Europe from Hong Kong.