The downturn in the broader digital currency ecosystem has hit some notable billionaires in the US, pulling four names out of the wealthiest American’s list, according to Forbes data.
The media outfit said of the 7 names that made the list of the 400 richest last year with a cumulative net worth of $55.1 billion, only 4 are left, and they all command just $27.3 billion.
With both the prices of digital currencies and the valuation of companies plummeting by a very wide range, the networth of all the billionaires profiled have dropped, even though all still rank as some of America’s richest.
The Crypto Billionaires Who Made the List
Sam Bankman-Fried (SBF) is the richest crypto billionaire in the United States and currently ranks in the 41st position. SBF now boasts of a cumulative networth of $17.2 billion, down from $22.5 billion as of this period last year. Sam is the CEO of FTX Derivatives Exchange and a host of other successful subsidiaries of the trading platform.
The next best-ranked billionaire is Sam’s Co-Founder, Gary Wang, whose networth and ranking are pegged at $4.6 billion and 227, respectively. Wang owned approximately 16% each of both FTX and FTX US.
Ripple Co-Founder, Chris Larsen is the 380th richest American with a total valuation of $2.8 billion (down from $6 billion). Chris’s valuation has been impacted by the price of the XRP coin and the long-protracted lawsuit with the US Securities and Exchange Commission (SEC) over the status of XRP as a security.
Brain Armstrong, the CEO of Nasdaq-listed trading platform Coinbase Global Inc ranks in the 388th position atop a $2.7 billion (down from $11.5 billion). With the shares of Coinbase plunging remarkably, Brian comes off as the billionaire that has taken the most hit over the past year.
Crypto Billionaires Who Fell by the Wayside
According to the Forbes report, The Winklevoss twin does not make a list this year despite their $2.2 billion networth. As of last year, the Gemini twin was worth $4.3 billion. Jed McCaleb (worth $2.5 billion) and Fred Erhsam (worth $1.1 billion) did not also make the elite list this year.
The number of crypto billionaires increased from twelve in 2020 to nineteen in 2021, according to the Forbes’ Annual World’s Billionaires list.
In 2021, the 58.3% surge in crypto billionaires was fuelled by Web3 innovations, the exponential growth of non-fungible tokens (NFTs), and the attainment of all-time high (ATH) prices by various cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
The top-three spots are dominated by crypto exchange founders, with Changpeng Zhao “CZ” of Binance taking the helm based on a net worth of $65 billion. CZ is followed by Sam Bankman-Fried, the founder and CEO of FTX, and Brian Armstrong, the founder and CEO of Coinbase, with a net worth of $24 billion and $6.6 billion, respectively.
Based on Forbes findings, CZ owns 70% of Binance as the 19th richest person globally. Binance dominance in the crypto space continues to be felt, given that it facilitated nearly two-thirds of all trading volume made by centralized exchanges. As a result, generating nearly $16 billion in revenue.
The newcomers on the crypto billionaire list include Nikil Viswanathan and Joseph Lau, the co-founders of Web3 infrastructure company Alchemy, with a $2.4 billion net worth each.
The others are Devin Finzer and Alex Atallah, the co-founders of the leading NFT marketplace OpenSea, with a $2.2 billion net worth apiece.
Some notable names also on the list include Cameron and Tyler Winklevoss of Gemini, Michael Saylor of MicroStrategy, and venture capitalist Tim Draper.
MicroStrategy, a leading business intelligence firm, has been leading the race in crypto institutional investment. At one time, Saylor opined that MicroStrategy was more inclined towards Bitcoin because it provided the best returns compared to other assets like precious metals, real estate, derivatives, stocks, and government debt.
Crypto exchange Gemini recently released “The Global State of Crypto Report”. It noted that cryptocurrency reached a tipping point in 2021 because it evolved from a niche investment into a globally established asset class.
The founders of Tesla, Oracle and Airbnb lost billions of dollars this week amid surging market volatility and continued pressure on tech stocks.
espite several days of declines, stock indices finished the week slightly higher, offsetting some of this month’s widespread losses. But the market’s troubles look far from over.
Many tech company CEOs and founders were unsurprisingly among the billionaires whose fortunes fell the most since the market close on Friday, January 21, according to Forbes’ calculations.
Leading the declines for the second week in a row: Tesla chief exec Elon Musk, whose fortune fell $22 billion after shares of his electric vehicle maker had yet another rough week, falling over 10%. Even though Tesla posted record profits after reporting quarterly earnings on Wednesday, investors focused on the company’s warning that supply chain issues may hurt growth in 2022.
Musk also took to Twitter on Thursday to insult President Joe Biden, apparently in response to being snubbed at a White House forum for electric vehicle makers. Still the world’s richest person, Musk now has a net worth of $222.2 billion, according to Forbes’ estimates.
Oracle cofounder Larry Ellison, meanwhile, fell from fifth to eight richest in the world over the course of the week as shares of his software giant sank more than 2%. Ellison, who owns about 35% of Oracle (and has pledged millions of his shares as collateral for loans), saw his fortune drop by $3.4 billion, to $109.2 billion, according to Forbes’ calculations. Shares of Oracle have been on a downward trajectory since last month, when the company confirmed it was planning to acquire medical records company Cerner for nearly $30 billion.
Other notable billionaires whose net worths fell this week include Airbnb CEO Brian Chesky and Roblox cofounder David Baszucki. Chesky, who cofounded the home rental company in 2008, dropped $1.1 billion to $11.3 billion, , as shares of Airbnb fell 9% this week. Meanwhile, shares of gaming company Roblox fell nearly 16% since last Friday, shaving roughly $700 million off of Baszucki’s net worth, which now stands at $3.9 billion, Forbes estimates.
Fourth quarter earnings season has so far failed to boost equities as some big name companies posted lackluster results. Combined with investor fears about the Federal Reserve’s tightening monetary policy and upcoming interest rate hikes, the stock market is now on pace for its worst month since March 2020.
As government bond yields surge, investors have continued to rotate out of riskier growth and tech stocks, many of which have been among the hardest hit in the market’s wider sell-off. The tech-heavy Nasdaq Composite, which is in correction territory after falling nearly 15% since the start of 2022, is on pace for its worst January ever—and its worst month overall since the financial crisis in October 2008
Other billionaires whose fortunes contracted this week: Coinbase CEO Brian Armstrong’s net worth dropped around $600 million to $7.3 billion, as shares of his cryptocurrency exchange fell 7.5%. Spotify cofounder Daniel Ek similarly lost around $400 million—putting his net worth at $2.9 billion—as shares of his music streaming platform fell nearly 12% since last Friday.
The fortunes of Snap cofounders Bobby Murphy and Evan Spiegel, declined by $350 million and $250 million, respectively. They’re now worth $6.4 billion and $6.2 billion, after Snap’s stock fell over 5% this week.
HERE’S HOW SOME OF THE WORLD’S RICHEST PEOPLE FARED THIS WEEK.
The net worth change is from close of markets Friday, January 21 to Friday, January 28.
Cryptocurrency mining services company BitFuFu, backed by industry giant Bitmain, is slated to go public in the United States by merging with a special-purpose acquisition company in a deal that will value the company at $1.5 billion.
BitFuFu announced on Tuesday that it would enter a definitive business combination agreement with Nasdaq-listed Ariz Acquisition, which would include $70 million of fully committed private investment in public equity, or PIPE, financing led by bitcoin mining-rig maker Bitmain and a spinoff company, Antpool Technologies.
The Hong Kong-based company aims to provide a “one-stop hashrate solution provider for miners of all sizes,” according to a company press release, and offers cloud-mining, self-mining, and miner hosting—effectively allowing users to invest in crypto mining without having to operate the facilities.
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“Entering this transaction now is the most optimal and strategic timing for enduring our rapid growth trajectory and increasing our global footprint in the crypto-mining industry,” says Leo Lu, founder and CEO of BitFuFu.
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“This milestone of becoming a publicly-traded company through our merger with ARIZ will further drive improvements to our corporate governance, increase transparency, and attract new talent to help us achieve our vision of becoming the top digital asset mining company,” Lu says.
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Lu founded BitFuFu in December 2020 after leaving Bitmain, where he worked for two years. He said that other key members of BitFuFu’s team were also former members of Bitmain and BitDeer, a spinoff controlled by billionaire crypto pioneer Jihan Wu.
In February 2021, BitFuFu partnered with Bitmain, becoming the company’s sole partner for cloud services, with the latter providing mining resources, such as machines and mining pools. BitFuFu entered into a 10-year mining hosting agreement with Bitmain globally, including the U.S.
Binance, the world’s largest cryptocurrency exchange, has teamed up with Sarath Ratanavadi’s Gulf Energy Development to look into setting up a digital asset trading platform in the Southeast Asian country.
Gulf Energy said the agreement with Binance is a response to the “rapid growth” of Thailand’s digital infrastructure in the foreseeable future, according to the firm’s statement filed to the Bangkok stock exchange on Monday. The two companies will study the possibility of establishing a crypto exchange and related business in Thailand, Gulf Energy said.
Binance described the collaboration as the “first step” in exploring opportunities in Thailand. “Our goal is to work with government, regulators and innovative companies to develop the crypto and blockchain ecosystem in Thailand,” the company’s spokesperson said.
Gulf Energy, one of Thailand’s biggest power producers, has been diversifying its portfolio with investments into renewable energy, motorway projects and telecommunications. The company in October reached an agreement with Singapore’s telecom giant Singtel to develop a data center business in Thailand. It came months after Gulf Energy acquired more shares of Intouch Holdings, which owns Thailand’s largest mobile phone operator.
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Gulf Energy’s tie up with Binance marks the first time the company has ventured into the crypto industry, which serves to underscore the rising popularity of digital assets among the country’s residents. In November, Thailand’s oldest lender Siam Commercial Bank announced that it had acquired 51% stake in local crypto exchange Bitkub for 17.85 billion baht ($538.7 million).
The crypto boom has also attracted the attention of Thailand’s financial authorities who recently stepped up scrutiny of the nascent industry. The nation’s central bank said in December it was considering rules that would regulate the usage of cryptocurrencies as a mean of payments. The move is said to be aimed at controlling the risks digital assets might bring to financial stability and also provide some safeguards for investors.
Binance has already run into trouble with the Thailand’s regulator. Last July, the Securities and Exchange Commission of Thailand filed a criminal complaint against the crypto giant for operating without a license. The offence carries a penalty of two to five years imprisonment and a fine of up to 500,000 baht. Binance said earlier that the platform had not been actively soliciting users in Thailand.
Binance was established in 2017 by Changpeng Zhao and fellow cofounder He Yi, who together built it into the world’s largest crypto exchange by trading volume, according to CoinGecko’s ranking. Binance processed $2.3 trillion worth of bitcoin and other crypto assets in December alone, says market data researcher CryptoCompare.
The value of meme-based cryptocurrency dogecoin surged Friday morning after Elon Musk said Tesla will accept the popular token as payment for some of its merchandise, signaling the electric car maker’s renewed interest in digital currencies after it temporarily accepted payments in bitcoin last year.
The price of dogecoin jumped nearly 12% Friday morning, at one point trading just above $0.2, after Musk made the announcement on social media.
Musk tweeted: “Tesla merch buyable with Dogecoin” and the company’s online store displayed prices for some items—including a whistle inspired by its highly anticipated Cybertruck model (300 DOGE), an electric quad bike for children (12020) and a belt buckle (835)—in both U.S. dollars and the popular crypto token.
Dogecoin’s growth stands out amid the relative calm of top cryptocurrencies, which remained relatively flat over the past 24 hours.
In December, Musk said Tesla would shortly be accepting dogecoin for some products and the token’s value soared nearly 20% in an hour. Musk’s social media posts are incredibly influential and have caused dramatic shifts in financial markets in the past, particularly with cryptocurrencies and assets popular with retail traders. Interest in dogecoin, one of the most volatile assets within an already volatile asset class, has tracked Musk closely, swiftly going from a joke to one of the world’s most valuable cryptocurrencies at its peak. It is currently the 11th most valuable token and has a market capitalization of over $26 billion, according to CoinGecko.
Tesla briefly accepted bitcoin, the world’s most valuable cryptocurrency by market cap, as payment for its electric vehicles. Musk cited concerns over bitcoin’s environmental impact when he announced the company would no longer accept it as payment, sending its value plummeting.
Tesla Will Accept Dogecoin Payments For Some Products And ‘See How It Goes,’ Says CEO Elon Musk (Forbes)
Bitcoin Tanks After Elon Musk Says Tesla Stops Accepting It Due To Carbon Energy Use (Forbes)
Kiat Lim—son of Singaporean billionaire Peter Lim—has joined the craze for non-fungible tokens (NFTs) with the launch of a private digital community for next generation entrepreneurs on a platform powered by blockchain technology.
Lim teamed up with Elroy Cheo—a scion of the family that owns edible oils firm Mewah International—to create ARC as an exclusive community which counts Asian entrepreneurs, venture capitalists, Web3 developers, cryptocurrency experts and social influencers among its members.
“Access today, share opportunities tomorrow, that’s our tokenization strategy and what makes ARC stand out from any other networking platform,” ARC cofounder Kiat Lim said in a statement. “ARC’s ambition is to be a bridge across the real and virtual world today, and, in the near future, the ARC metaverse.”
ARC is the second technology startup established by Lim. In October, he and his father launched ZujuGP, a digital community built around football endorsed by Manchester United’s Cristiano Ronaldo. Lim is also the executive director of Singapore-listed Thomson Medical Group and CEO of Thomson X, the healthcare provider’s digital platform.
The beta version of the ARC app, which uses NFTs to authenticate membership, has already been launched on the Apple store, making it available for iPhone users. ARC is also developing a version of the app for Android smartphones.
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Apart from promoting collaboration among entrepreneurs and innovators, ARC also serves as a venue for members to discuss topics such as the challenges of launching new businesses amid the lingering impact of the Covid-19 pandemic.
“By creating a safe space for Asia’s dynamic and purpose-driven generation to connect authentically, ARC is a new collaborative destination that opens up endless possibilities,” ARC cofounder Elroy Cheo said.
Cheo, who spent the past decade helping his family’s business expand into new markets, has been dabbling in cryptocurrencies and NFTs in the last few years. He is the architect of the ARC community, which plans to add an ARC metaverse as well as gaming and decentralized finance elements that would allow members to earn while collaborating on the platform.
Previously anti-crypto investors are increasingly turning to Bitcoin and its brethren as a hedge against fiat currency inflation concerns.
One example is Hungarian-born billionaire Thomas Peterffy who, in a Jan. 1 Bloomberg report, said that it would be prudent to have 2-3% of one’s portfolio in crypto assets just in case fiat “goes to hell”. He is reportedly worth $25 billion.
Peterffy’s firm, Interactive Brokers Group Inc., announced that it would be offering crypto trading to its clients in mid-2020 following increased demand for the asset class. The company currently offers Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, but will be expanding that selection by another 5-10 coins this month.
Peterffy, who holds an undisclosed amount of crypto himself, said that it is possible that digital assets could reap “extraordinary returns” even if some could also go to zero according to Bloomberg. “I think it can go to zero, and I think it can go to a million dollars,” he added before stating “I have no idea.”
In early December, the billionaire predicted that Bitcoin could spike as high as $100,000 before markets begin to retreat.
Related:Tom Peterffy Believes Bitcoin Could Wreck Might Go to $100K Before Crashing
Bridgewater Associates founder Ray Dalio is another renowned billionaire that revealed his portfolio contained some Bitcoin and Ethereum last year. This revelation came just a few months after he questioned crypto’s properties as a store of value.
He has now changed that stance and views crypto asset investments as “alternative money” in a world where “cash is trash’’ with inflation eroding purchasing power.
In late December, Dalio commented that he was impressed at how crypto as lasted, before stating “Cash, which most investors think is the safest investment is, I think, the worst investment.”
Billionaire hedge fund manager Paul Tudor Jones also bought Bitcoin last year, labeling the move as a hedge against inflation.
Pandemic-induced stimulus packages have caused economic turmoil across the globe, the fallout from which could linger for decades. In the United States, inflation is at a 4 decade high of 6.8%. This has resulted in a surge in the Consumer Price Index (CPI) as the costs of daily goods continue to increase.
The billionaires are already seeing the danger signs with fiat currencies and central bank manipulation, and they are increasingly turning to crypto assets. The year 2022 could see more wealthy investors join their ranks if the trend continues.
Binance, which runs the world’s largest cryptocurrency exchange, has been green lighted by regulators in Bahrain and Canada for its affiliates to operate in the two countries.
The company announced on Monday that it had obtained in-principle approval from Bahrain’s central bank to establish itself as a crypto-asset service provider in the island nation.
Binance said it will still have to complete the full application process, which is expected to close in “due course.” If concluded, Bahrain would become the first country within the Middle East and North Africa (MENA) region to grant regulatory approval to a Binance entity.
“The Central Bank of Bahrain has demonstrated leadership and forethought in addressing crypto as a future asset class,” said Changpeng Zhao, the billionaire founder and CEO of Binance. “The approval recognizes Binance’s commitment to comply fully with regulatory requirements and our broader commitment to anchor operations and activities in Bahrain.”
Zhao also announced on Twitter on the same day that a separate entity of Binance has been registered with Canada’s financial intelligence agency, the Financial Transactions and Reports Analysis Centre of Canada. The entity, named Binance Canada Capital Markets, will offer services that involve cryptocurrencies, foreign exchange and money transfers.
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The application and registration are part of Binance’s efforts to become a “fully regulated centralized” crypto exchange. The firm has been doubling down on compliance after drawing attention from financial regulators around the world over its decentralized corporate structure and lack of proper operating licenses.
One of the significant measures Binance took is actively looking for a location to set up its formal headquarters. The company has reportedly been in talks with regulators in Dubai about basing its head office in the United Arab Emirates, according to Bloomberg.
Last week, Binance signed a cooperation agreement with the Dubai World Trade Centre Authority to form an international virtual asset ecosystem. The company has also named Richard Teng, the former CEO of Binance Singapore, as the regional head of Binance’s Middle East and North Africa unit.
Jihan Wu gives a rare interview to discuss his latest ventures, his departure from mining giant Bitmain and the future of the crypto markets.
Cryptocurrencies were born to be volatile, says Jihan Wu, but their growth over the long term will far outweigh their price fluctuations. “Even if 95% of today’s coins lose all their value and disappear, the remaining 5% will grow massively,” he says.
Wu’s optimism is borne of his experience. He discovered bitcoin and recognized its early promise more than a decade ago, when he saw it being used to buy computer hardware and IT services in online forums like Bitcointalk.org. But to break out of its niche market and gain wider acceptance, bitcoin would need far more infrastructure to support it. So, Wu began working on a solution that would play a vital role in bitcoin’s development.
In 2013, Wu teamed up with Micree Ketuan Zhan to launch Bitmain Technologies, a supplier of specialized hardware known as mining rigs which are designed for the single task of adding transactions to bitcoin’s blockchain. The people who own the hardware earn, or mine, new bitcoins by making their processing power available to the network.
As bitcoin’s price rose over the years, Bitmain’s mining rigs became a runaway success, and it turned both Wu and Zhan into billionaires. By 2018, Bitmain had become the world’s largest supplier of cryptocurrency mining rigs with a market share of 75%, according to Frost & Sullivan. And the Beijing-based company was preparing for a multibillion-dollar public listing in Hong Kong—until bitcoin crashed, losing 70% of its value by the end of that same year.
Bitmain’s IPO became a casualty of bitcoin’s volatility and placed a heavy strain on the company’s finances. And the two cofounders were quickly thrust into a scramble for survival that later evolved into a struggle for control of the company.
Today, Wu looks back at bitcoin’s twists and turns as milestones on his entrepreneurial journey toward building one of the world’s largest crypto business empires. Bitmain has since returned to profitability and continues to dominate the global market for mining rigs in spite of China’s recent crackdown on crypto mining and trading. In response to the new restrictions, the company ceased shipments to its clients in mainland China, although overseas customers are said to be unaffected. Bitmain is also building rigs that use less energy to address regulator’s concerns, but it did not elaborate on any further measures it intends to adopt.
Wu stepped away from Bitmain at the beginning of the year to focus on his role as chairman of two spinoffs both based in Singapore—Bitdeer Technologies, a cryptocurrency mining platform that’s already announced plans to list on the Nasdaq at a $4 billion valuation, and Matrixport, a financial services firm valued at $1 billion in its latest funding round.
Matrixport’s launch in February 2019 was another demonstration of Wu’s long-term optimism for the crypto industry. Bitcoin was still in a bear market when he and his fellow cofounder John Ge Yuesheng established their firm.
“We believed that crypto and blockchain together would experience rapid growth in the future to tens of trillions of dollars,” Wu says. “And many of these new users will stay in the crypto market forever, so they’ll need advanced and sophisticated products to manage the wealth they accumulate in crypto assets.”
Their decision to push ahead looks prescient now. Since Matrixport was launched, the overall market cap of cryptocurrencies shot up to an all-time high of $3 trillion in November, according to data from CoinGecko. And the global market size of crypto users has more than doubled to 221 million people in the first half of the year, according to a report from Crypto.com.
Cryptocurrencies have been riding high this year on signs that digital assets are becoming more mainstream. El Salvador became the first country in the world to accept bitcoin as legal tender and a growing number of companies including AMC, AT&T, Mastercard, Microsoft and PayPal and are now accepting some cryptocurrencies as payments.
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Buoyed by the rising tide of the crypto market, Matrixport raised $100 million during a Series C funding round announced in August that was led by partners of Yuri Milner’s DST Global, Adrian Cheng’s C Ventures and Kuok Meng Xiong’s K3 Ventures along with other participants including Qiming Venture Partners and existing backers like IDG Capital and Dragonfly Capital.
Wu’s track record of building multiple multi-billion dollar companies is nearly unparalleled, says Adam Goldberg, cofounder of Standard Crypto, a venture fund based in San Francisco. Goldberg, who was formerly with Lightspeed Venture Partners, became an investor in Bitmain around 2017, and later joined the board of Matrixport.
“Jihan is a generational entrepreneur. He is uniquely agile, resilient, and always peeking around corners to preview the future of the crypto industry.”
Matrixport’s name alludes to its aim of becoming a gateway or portal for investors to enter a new digital realm, much like in Wu’s favorite movie The Matrix. The firm’s strategy involves offering investment products like those found on Wall Street but tailored to crypto investors.
Matrixport’s services include custody, trading, lending and structured products. Wu said they were the first to offer crypto dual currency products, which are investments that offer guaranteed yields with the payments settled in one of two possible cryptocurrencies depending on market prices at the time. The firm says it now has $10 billion in assets under management and custody and has more than $5 billion in average monthly trading volumes.
Wu’s other venture, Bitdeer, is a mining platform that currently operates five pools in the U.S. and Norway with more than 100,000 mining units under its management.
Bitdeer and Matrixport were both spun off from Bitmain as part of a settlement deal reached between Wu and Zhan after the two cofounders clashed. A nondisclosure agreement prevents Wu from speaking in detail about the terms of that deal, but he was able to discuss the circumstances that led to it with Forbes Asia for the first time.
“That was a tough period for our business and for me. And of course, the pressures of running a complex manufacturing business built up and eventually led to a falling out between us two cofounders,” Wu recalls.
Bitmain had rapidly gone from generating $2.5 billion in revenue in 2017, and a profit of $742 million in the first half of 2018, according to its prospectus filed to the Hong Kong stock exchange, to the point it was losing money and laying off swathes of staff.
The company had ventured into a number of different areas during the boom time—AI, mining pool construction, a decentralized crypto exchange, venture capital, etc.—but many of those initiatives failed to turn a profit during the bear market of 2018, which came to be known as “crypto winter,” a deep selloff followed by a long period of flat trading.
Bitmain’s two cofounders, who had previously worked together as co-CEOs, disagreed over its strategic direction and a power struggle ensued. The dispute became public at times until a deal was finally brokered at the end of last year that saw Wu step down as chairman and CEO of Bitmain, although he still retains a stake in the company. Zhan is now running Bitmain’s manufacturing operation and another mining pool called Antpool.
“The settlement agreement marks the end of the hardship. Bitmain didn’t go bankrupt, instead it’s doing really well now,” Wu says. “Bitmain’s accumulated net profit is expected to reach between $2 billion and $4 billion. It’s a company that generates very high profits.”
Wu’s path to crypto entrepreneurship began with his discovery of bitcoin when he was working as an investment analyst in Beijing. Having studied economics and psychology from Peking University, he instantly became engrossed by Satoshi Nakamoto’s idea for a decentralized digital currency.
“The white paper he [Nakamoto] published in 2008 opened up a new world and offered an opportunity for new players like us to participate.”
Wu said he immediately dropped his studies to become a certified accountant to instead focus on learning and then investing in bitcoin. After buying hundreds of coins himself in 2011, Wu invested in ASICMiner, a bitcoin mining company founded in 2012 by Jiang Xinyu, or Friedcat as he was known in various online forums. The profits Wu gained from that deal was combined with capital from a group of other investors to start Bitmain in partnership with Zhan in 2013.
Zhan was a chip designer who had been running his own business of making set-top boxes for televisions prior to teaming up with Wu. The two established Bitmain as one of the earliest manufacturers of the specialized chips used for mining cryptocurrencies known as application-specific integrated circuits, or ASICs.
Wu’s initial aim was to be a VC investor behind Bitmain, but after committing his capital, he soon realized the heavy demands of running a tech startup required him to get involved in managing the company.
In less than four years, Bitmain became the most influential company in the bitcoin economy. Bitmain’s vertical integration extended from designing the chips used in its mining rigs to assembling the hardware and selling them to customers around the world. At the same time, Bitmain was operating mining pools on contract to customers, as well as owning several of its own pools. Bitmain’s pools contributed about 37% of the aggregate processing power of the Bitcoin network by 2018.
In spite of the regulatory uncertainty that characterizes cryptocurrencies in many of the world’s largest markets, Wu believes the industry will continue to develop unique innovations because it isn’t subjected to the constraints of the traditional financial system.
“Innovations like DeFi [decentralized finance] are breathtaking” he says. “Technologies like crypto and blockchain have created a new world, allowing fintech entrepreneurs to make big achievements. Eventually, traditional financial institutions and regulators will embrace blockchain technology.”