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Corona causes sales of Bitcoin mining companies to collapse by 50 percent

The Covid-19 pandemic has left deep marks on Ebang International Holdings Inc.’s half-year results. The chip designer and manufacturer of Bitcoin mining hardware presented its business figures for the first half of the year on September 25th.

For the stock market newcomer — since the end of June, the company is on the Nasdaq Composite Index traded — was H1 2020 anything but a success story. The turnover of the Bitcoin mining company has plummeted by over 50 percent compared to the same period last year.

In the semi-annual report that the Chinese company submitted to the US Securities and Exchange Commission, the corona outbreak is cited as the main reason for the decline in sales. The reason for the loss of sales was less the intermittent slump in the Bitcoin price than the supply bottlenecks for the chips that Ebang uses for its Bitcoin miners.

Our chip suppliers have reduced their production capacity due to the effects of COVID-19, which resulted in our resource scarcity in the first six months of 2020,

says Ebang CEO Dong Hu in the report quote. According to Hu, they reacted to the challenges of the corona crisis in good time:

Given the turbulent social and industrial environment, we took timely and proactive steps to ensure the resilience of our business operations and allow us to perform well after market conditions return to normal.

Apparently, this also includes Ebang putting out feelers for new sources of income, namely in the direction of blockchain-based financial services.

Against this background, our management has actively optimized our earnings structure based on the productivity ratio and strategically examined the expansion into blockchain-based financial services.

Ebang CFO had already leaked in June that the company would like to expand its activities beyond Bitcoin mining. There was talk of a planned “offshore” exchange; At the time, the CFO was still silent about where this should arise. In August, Ebang shed some light: the establishment of a subsidiary in Singapore is intended to pave the way for a Bitcoin exchange in the country. Recently followed a similar announcement for the North American market: On September 28, Ebang has a new subsidiary company in Canada announced, which is also committed to building a Bitcoin exchange. The company hopes that by expanding its business activities, it will become more independent of the Bitcoin rate.

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