Who will acquire Huobi? Could it be a Hong Kong based conglomerate or a consortium of Huobi executives?

–News Direct–

Recently, rumors that global cryptocurrency exchange FTX may acquire Seychelles-based Huobi have been making their way around the web, with the likes of Bloomberg and Wu Blockchain reporting so. Reports indicate that Huobi Global may be valued at up to US$3 billion, and that a host of different investor consortiums have lined up to submit bids.

And yet, on the morning of August 29, several Twitter influencers posted that FTX’s bid to acquire Huobi had won out, and that Huobi was already renamed HTX (short for FTX + Huobi). Several Huobi employees acknowledged that their e-mail domains had been officially changed to htx-inc.com, fueling such rumors even further. In light of these rumors, the price of HT fluctuated, jumping as much as 15% within a 24-hr period, and is now trading at 4.98 USDT, as of August 30. While media inquired about an official response from Huobi, representatives declined to elaborate further, responding with the following statement:

“We do not have any information to share at the moment. Huobi Global is operating normally and we remain dedicated in providing safe and reliable services to our users. Thank you for your support.”

Justin Sun quickly denied that he planned to acquire Huobi, and on August 29, SBF also flatly denied the rumors through his official Twitter account. Quickly afterwards, some observers speculated that the rumors were spread just for the sake of publicity, and that the real buyer was an unnamed conglomerate in Hong Kong. Others mentioned that it could be a consortium of Huobi executives.

Regardless, enthusiasm for the transaction in the crypto sphere continues to run high, with many users hoarding Huobi Tokens (HT) in anticipation of an acquisition-fueled price jump. Others are simply curious about the possibility that FTX could acquire Huobi, with some speculating that $3 billion was a lowball estimate for one of the world’s largest cryptocurrency exchanges.

Huobi could provide Asian market expertise for international players

From our perspective, Huobi could provide a wealth of expertise and knowledge for international players looking to crack into the China market. Despite regulatory hurdles, the China market is still likely the world’s largest market for cryptocurrency trading, and is far from saturated. Huobi was founded in China, and has developed a steady track record of nine years without any security incidents or hacks. Prior to the crackdown on the industry, Huobi ranked as one of China’s top three cryptocurrency exchanges, together with Binance and OKX.

And yet, it has gradually retreated from the Chinese market due to a regulatory crackdown on cryptocurrency services in September of last year; the size of its business has also shrunk significantly. But Huobi possesses significant market share throughout the rest of the Asia-Pacific region; given its wide range of products and services, advanced users looking for a more comprehensive experience tend to turn to Huobi. It is for this reason that many international investor consortiums are evaluating the prospects of acquiring Huobi.

Is a $3 billion valuation for Huobi too low?

We believe that a $3 billion valuation for Huobi is too low. The reason is because Huobi Group consists of many business segments aside from its core exchange. These include Huobi Ventures, Huobi Incubator, public chains, an NFT marketplace, the iToken DeFi wallet business, and other Web3-related business segments.

Granted, Huobi had sold off its stake in the HUSD stablecoin in April 2022, and also sold its messaging app Huobi Chat to Taiyi Group in August of this year. Huobi also sold its stake in NFT platform iBox in January of this year, as part of its retreat from the China market.

By selling off such non-core assets, Huobi will have a more asset-light business model, with fewer, more valuable core businesses, no debt, no financial pressure, and more of a focus on its exchange business. This, combined with the valuable licenses that Huobi Global has acquired around the world, indicates that Huobi is severely undervalued and could be worth much, much more than the initial US$3 billion figure reported by media.

Crisis or opportunity: How much further can a revitalized Huobi grow?

Over the last nine years, Huobi has developed a strong reputation that is characterized by an absence of security incidents, stable financial condition, and strong user confidence in its platform. It has survived many bear markets throughout the years; its strong balance sheet and cash flow ensure that users don’t have to worry about the platform becoming insolvent. Additionally, in the context of evolving cryptocurrency regulations around the world, Huobi has made immense progress in obtaining the licenses and registrations it needs to provide services in different countries. Japan, South Korea, Dubai, Australia, and the United States are just a few examples. These attributes make the company a highly coveted asset.

Huobi has made it clear that it is looking for new shareholders to make up for its shortfalls in the global market. Contrary to popular belief, users will not be affected by a change in shareholder structure as Huobi’s experienced management team is incentivized to keep the company in good financial and operating conditions, ensuring that users will always be able to redeem their assets 100%. The hope is that new investors will introduce the industry expertise and business acumen needed to help Huobi grow and accelerate its globalization efforts.

And by selling non-core, uncompetitive businesses such as iBox and HUSD, Huobi is re-aligning its business structure to focus on its core exchange business. It remains apparent that Huobi will continue to provide money-making opportunities for its users, given ongoing promotions such as Primelist, CandyDrop, PrimeBox, and its newly launched Prime membership program.

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