Foreign media: Wu Jihan will launch a new company Matrix, Bitmain will help it become the world's largest crypto asset OTC platform

Introduction:

1. Jihan Wu, former CEO of Chinese mining machine maker Bitmain, will launch a new startup, Matrix, by the end of July.

2. Matrix is ​​a custody and trading company that was originally incubated within Bitmain, which is understood to have subsequently become a major customer.

3. With Bitmain as a major partner, Matrix could become “the world’s largest OTC trading platform” overnight, the source said.

Image source: pixabay

Details about former Bitmain CEO Jihan Wu’s latest venture, Matrix, have not been particularly disclosed.

But four sources close to Bitmain said Wu’s new crypto service venture, Matrix, is about a month away from launching.

While Matrix is ​​said to be in talks with potential clients around the world (excluding the United States), the company’s largest client will be Bitcoin mining giant Bitmain itself. It is assumed that Matrix will provide custody and loan services to Bitmain, which, as a miner, will generate a large amount of crypto assets while attracting a liquidity pool for its over-the-counter (OTC) products.

A source who works closely with Asian investors said:

“Let’s put it this way, they will become the largest OTC desk and asset manager (in the world) overnight. With that kind of liquidity, (low) prices will follow.”

They noted that Matrix should have a competitive advantage in the region because the Asian market is "much more price sensitive."

The news may come as a surprise, as it was previously thought that Matrix was born out of a rift between Wu and Bitmain’s other co-founder, Zhan Ketuan. But now it appears that the exodus of Bitmain’s Beijing employees and resources may have been intentional and part of a broader strategic plan. Bitmain’s investment director Cynthia Wu works closely with Matrix.

“The relationship is very good,” noted a source close to key figures.

They also explained that Bitmain began building a trading and custody division in-house, only to decide in February of this year that there was an opportunity to spin it off as a separate legal entity.

Bitmain did not respond to a request for comment.

It is unclear what role Wu will play at Matrix, though he is said to be managing the company as "chairman," according to two sources. Wu was eventually named CEO of the project, according to a Chinese media report. Wu remains 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 Zhan Ketuan are both billionaires, the richest people in the crypto world. However, sources have suggested that Matrix may be part of the two founders' exit strategy.

As for Matrix’s relationship with the Chinese market, it is unclear whether the two will remain connected as the country currently has a blanket ban on crypto trading. Matrix may have an offshore holding company, but some suspect that Matrix may eventually gain a monopoly on operating in China as part of the country’s desire to more strictly regulate the country’s underground markets.

“It’s more of a ‘if we can’t beat them, how do we lead them’ attitude,” they noted.

Still, whether or not Matrix can operate in China, the region will be getting a major new player to compete with international incumbents like Coinbase and BitMEX.

“Matrix will make Asia the new center of gravity for crypto OTC trading,” one source concluded.