A year can make a lot of difference in the cryptocurrency roller coaster world.
At the beginning of 2018, the Chinese Huobi group offered a senior executive the highest year-end bonus of 300 bitcoins, worth around US $ 3 million at the time. Now the exchange of digital resources is letting people go, after bitcoin has lost 80% from its peak.
However, despite trading volumes falling to one tenth of its record at some point, the Beijing-based company is still profitable every month, according to Livio Weng Xiaoqi, CEO of Huobi Global, the company's main trading activity.
"We do not know how long the bear market will last, so it's still possible that we will struggle to survive," Weng said in an interview at his Beijing office. "We have to plan ahead and spend the money carefully."
He refused to specify Huobi's revenue, but said it was largely generated by transaction fees.
The exchanges are among the first and most obvious victims of the prolonged bearish cryptocurrency market, which have swept over 600 billion dollars in the total value of about 2,000 digital coins since January 2018, according to data from CoinMarketCap, which classifies the cryptocurrencies from their market value.
The collapse of the market last year was attributed to the bursting of a bubble in the first offers of coins (ICO), a largely unregulated crowdfunding method involving digital money, as well as the bitcoin cash "hard fork", which led to a split in the fourth-largest cryptocurrency in two separate entities due to fundamental disagreements among its developers.
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The cryptocurrency crisis has begun to bite. Leading initiatives such as Bitmain, headquartered in Beijing, the world's largest manufacturer of specialized computers used for the creation of new digital currency units, and the Swiss software production firm ConsenSys have announced all plans for redundancies.
While Huobi is still trying to expand its main trading business, which contributes more than 70% of its total revenue, the company is cutting staff into loss-making units such as venture financing and news aggregation, according to Weng.
At the beginning of this month, Huobi closed its branch in Shenzhen, which hired about 30 people to search and build new applications. The Huobi Info news app is now managed by a few employees, down by a couple dozen at its peak. In total, the company still has a workforce of 1,300 employees globally, having cut around 100 positions in recent weeks, Weng said.
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Founded in 2013, Huobi was at some point the largest bitcoin exchange in the world by trade volume, as the platform offered zero transaction fees to attract risk-conscious Chinese investors. In September 2017, Beijing's ban on cryptocurrency negotiations forced Huobi to migrate its exchange business to Singapore.
Huobi hosts a daily trading volume of 370 million US dollars, about half of the transactions on the main trading Binance, according to CoinMarketCap.
More than 70% of Huobi Global users are Chinese who live outside of China or use a VPN service, judging from the user interface language settings. They are followed by Russian and English speakers, said Weng.
"Our biggest advantage over the competition is that we have licenses in all the major countries – we are the only one of the best global exchanges," said Weng.
Regulators all over the world are gearing up to regulate cryptocurrency trading, especially when it comes to real money. In addition to its main digital asset trading platform, Huobi has obtained licenses to operate fiat-to-crypto exchanges in markets including the United States, Japan and Europe. In comparison, Binance has left the United States and Japan amid regulatory concerns and has instead expanded into smaller nations such as Malta and Uganda.
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"Despite their success abroad, I think it would be very difficult for them [Huobi] to compete with US exchanges locally, "said Joyce Yang, founder of Global Coin Research in New York, which focuses on the Asian cryptocurrency space.
"They can have a very successful business focused on Asia and China, and they should really double there," Yang said. "But in the space of exchange, everyone is trying to protect himself and confront each other."
Huobi launched a new platform for futures trading in December to challenge OKEx and BitMEX and claimed to have accumulated over $ 20 billion in trading volume within a month.
The company has released a new app at the start of this month called Huobi Chat, which is a mix of cryptocurrency portfolio and messaging app, and aims to attract 1 million users within the first 50 days of its launch. Red flags looming over the offices of Huobi in Beijing recall the employees of that goal and describe them as an "iron army".
At the end of the day, such efforts need "a window of opportunity, another upward rush, to repay," Weng said.