Hong Kong crypto firm Diginex Ltd. announced plans to go public today, choosing a U.S. over an Asian stock exchange and seizing on investor interest amid a rally in Bitcoin price.
Diginex will list on the Nasdaq through a reverse merger with 8i Enterprises Acquisition Corp., in deal that values the firm at $276 million including debt. The company founded in 2017, avoided the costs and complexities of a strict regulatory review by conducting the reverse merger. Its shareholder will get 20 million 8i shares valued at $10 each.
Bitcoin has more than doubled over the past three months, reaching $12,572 yesterday, according to TradeBlock. The rally is boosting investor interest in crypto companies, particularly in Bitmain, the world’s most-profitable crypto miner, which is considering reviving IPO plans after abandoning them as prices fell last year.
“With bitcoin getting somewhat close to the previous highs back in December of 2017, I think you’ll start to see these crypto companies be considered a hot space again,” John Todaro, TradeBlock’s director of digital currency research, said in an interview with Karma. He also noted that Blockchain technology companies that don’t offer digital currencies could also benefit from the market rally. “It basically gives credence to Blockchain technology.”
- While cracking down on cryptocurrency exchange and mining, the Chinese government has elevated Blockchain technology to a national priority. Bitpro Consulting’s CEO Mark D’Aria told Karma that China’s government “seems to be more interested in building something that they could influence, rather than supporting things that would get out of control.”
- The SEC is open to initial coin offerings, which raised $7.8 billion in 2018, according to ICO Data. The Hong Kong Stock Exchange sees it as “premature” for any crypto company to go public because of the lack of Blockchain-related regulatory frameworks.
- Karma Takeaway: China’s mixed attitude toward cryptocurrency and Blockchain leads crypto companies to go public in the U.S., where the SEC is more welcoming.