Can the Cryptocurrency Exchange Ride This Wave?
Time and tide wait for no man, and neither do opportunities in the cryptocurrency industry. The market has always been fast-paced and volatile – once a trend begins, everyone rushes to get on the bandwagon and late adopters will lose out. In light of recent market changes, some projects have begun preparing for the bull run. Likewise, venture capitalists are also scrambling to invest in various blockchain projects before bullish signals begin.
FBG Capital, one of the largest cryptocurrency venture capitalists in China, recently announced its strategic investment in BiKi exchange.
The two will cooperate to provide users a better platform for trading with more personalised services. FBG founder Zhou Shuoji is already recommending BiKi Trading Platform to his close friends, proving that BiKi is in the running to become one of the top cryptocurrency exchanges.
Perhaps driven by this positive news, investor sentiment has boosted, resulting in a weeklong increase of 300% in BiKi’s token, BIKI. This has enabled BiKi to make it into the top 15 exchanges in the world, according to Coingecko.
With many exchanges guilty of washtrading, why did FBG choose to invest in an exchange? With BiKi nowhere near the top amongst all the exchanges of the world, how did it gain the favour of FBG? With these questions, we proceed to analyse this partnership.
- Who is FBG Capital?
- Why FBG Capital chose to invest in BiKi and BiKi’s unique characteristics?
- How FBG Capital’s investment can drastically impact BiKi in the near future?
1. The Invincible “Goldman Sachs of Crypto”
FBG Capital was established in May 2016 and was invested by Sequoia Capital, a Silicon Valley venture capital. Strangers to cryptocurrency venture capitalists may find the name “FBG” unknown, but upon mentions of their previous investments, one will surely coin them a venture capital worthy of attention.
Compared to the market today, the digital currency market in 2017 was vastly different– there is little to no recognition of cryptocurrencies. Yet, FBG has set its eyes and invested in projects years before they became well-known. These investments include 0x, Zilliqa, OmiseGO, IOST, Aelf, most of which were not regarded as worthy investments by mainstream venture capitalists.
According to reports, FBG invested in 21 projects that year, of which only 9.5% fell through, but the remaining reaped a combined profit as high as 418.6%, with some projects increasing 10 to 100 times. These accomplishments have allowed FBG to gain respect in this industry.
It is also worth noting that the founder of FBG Capital, Zhou Shuoji is the second Chinese in the blockchain industry to appear on the cover of Forbes Magazine, where he famously announced his hopes to make FBG the “Goldman Sachs of Crypto”. Looking at the investment distribution map of FBG in its early stages, financial and public blockchain projects account for more than half of the investments, while cryptocurrency exchanges account for only 4%. Since the market is dominated by a few top exchanges, and Zhou has notoriously accurate investments, why would he choose to invest in BIKI, an anonymous exchange?
2. BiKi is not “just another exchange”
For high profile investors, there is no fear in the volatility of an investment, but in the missed opportunity for an investment.
Several centralized giants have entered blockchain industry this year – Facebook, Goldman Sachs, JP Morgan, all have their own digital currencies. Coupled with mainstream media’s constant coverage, digital currencies have gained mass acceptance in contrast to two years ago.
If the bull market breaks out again, there will be a high influx of new investors entering the market. Exchanges, being the centre of trade, will be the greatest benefactor of this new wave of users. Any ambitious venture capitalist will jump at the opportunity to invest in an exchange, and FBG is no exception.
Based on the philosophy of FBG founder Zhou Shuoji, the fundamentals, originality, sustainability and industry experience of a project are aspects worthy of attention. BiKi takes up the minority of investment choices by FBG Capital, proving its outstanding qualities. Based on official reports, BiKi has two signature qualities that are unique to the exchange:
Firstly, the listing of quality projects.
In this industry, investors tend to focus on tokens in high demand. Looking back at the grandeur of IEO early this year, investors will flock to any trending project. For exchanges, 2019 is an era of “using users to attract users” — listing more popular projects will become the core competitiveness of an exchange.
Based on BiKi’s listed projects, almost all the top 100 tokens in the market are listed on the exchange. BiKi has also mentioned that any popular projects in the future will be listed on the exchange at a moment’s notice. In fact, if we rank exchanges based on the projects they choose to list, BiKi is already ahead of 90% of the exchanges.
Secondly, development to increase market share.
The sole method to increase market share for exchanges is to increase its users. When an exchange has significant market influence, can it have sufficient assets to compete against other exchanges that have inflated trading volumes from wash trading. Even top exchanges like Huobi and OKEx are facing the problem of increasing market share today.
BiKi is an innovator in the increment of market shares. Unlike conventional user growth tactics used by other exchanges, BiKi uses Chinese e-commerce platforms like Pinduoduo and Yunji to convert regular audiences into new exchange users. Despite their lack of knowledge of cryptocurrencies, these users seek to invest, increasing the demand for cryptocurrencies.
This seems to have an effective strategy for BiKi. In less than a year after its establishment, BiKi has already achieved 1.2 million registered users, 100,000 daily active users, and a daily transaction volume of 20 to 100 million USDT. Its net profit in May has reached 10 million RMB n(~USD 1.5 million). At this rate, BiKi seems to have the potential to compete against top exchanges like Huobi and OKEx.
BiKi’s strategy to leverage on its listed projects to attract users, while expanding into foreign markets is what sets it apart from other exchanges. With quality digital assets and consumer demand going hand in hand, BiKi will emerge a dark horse when the bull market breaks out, and FBG could be anticipating another investment opportunity.
3. BiKi will be a force to be reckoned with.
As a leader in the cryptocurrency industry, FBG will improve branding for BiKi. Once the industry gets wind of FBG’s investment in BiKi, the latter will no longer be unknown and gain attention in the long run:
Firstly, BiKi will gain a lot of attention from investors.
This can be seen in the token value of BIKI, which has skyrocketed by 300% in one week, which shows investors’ recognition of the exchange.
Secondly, BiKi will gain more attention from other venture capitalists.
Since BiKi was favoured by FBG, a top-notch venture capitalist, other venture capitalists will follow suit and invest in the exchange.
In fact, FBG was not the first to invest in BiKi. Earlier this year, Du Jun, the co-founder of Huobi and the founder of Jinse Finance, announced that he personally invested $5 million in BiKi, telling his circle of friends that “This year’s miracle should belong to BIKI.”
In the long run, in addition to public attention, this investment will allow BiKi to acquire more high-quality resources to improve its platform.
FBG has been deeply involved in cryptocurrency for years. In addition to its reputation, FBG has its own capital, professionals and market resources that will help BiKi widen its market potential, enabling BiKi to gain traffic quickly and obtain priority listing for projects. This will ensure a higher quality of projects distributed to a vast userbase.
With the support of FBG’s investment, BiKi will have more time on their hands to connect with more users, create a richer experience and increase the intrinsic value of BiKi, progressing towards a top-tier exchange.
After a year of crypto winter, venture capitalists have been extremely cautious in their investments, as market sentiment have been largely negative. The fact that BiKi has won the favor of FBG’s investment during the bear market is not attributed to luck but on its merits. Based on its current progress, BiKi is a strong player amongst exchanges and a force to be reckoned with.