New Players in the Web3 Space: Huaxing Capital Doubles Down on the Encryption World

The M&A giants of the Web2 era are expanding into the Web3 space. Huaxing Capital, an investment bank that has led multiple mergers of internet giants, is now setting its sights on the encryption world. Recently, the board of directors of Huaxing Capital Holdings passed an important strategic resolution to invest $100 million over the next two years to expand the group's Web3 business and directly invest in encryption assets.

This news quickly triggered a market reaction, and the stock price of Huaxing Capital Holdings surged accordingly. As an investment bank that once influenced the situation during the Web2 era, Huaxing Capital seems to be trying to regain a key position in the new round of financial revolution.

However, Huaxing Capital is not a newcomer in the encryption field. In fact, they have quietly laid out plans for many years, venturing into multiple areas such as mining enterprises, stablecoins, and trading platforms. As early as 2018, Huaxing invested in the stablecoin issuer Circle. In 2019, they assisted Canaan Creative in successfully listing on NASDAQ, becoming the world's first publicly listed blockchain mining machine company.

In 2021, Huaxing invested in the encryption financial service provider Amber Group, which completed its merger and listing on the US stock market, at one point being valued at over $3 billion. In 2022, Huaxing completed its investment in Matrixport and assisted its affiliated company in completing the merger and listing process. In 2023, Huaxing participated in the merger case of Bitmain.

From IPO planning, equity investment, to mergers and acquisitions restructuring and financing consulting, Huaxing Capital is accurately penetrating the encryption ecosystem with the professional capabilities of a traditional investment bank and a localized network.

However, Huaxing Capital also went through a difficult period. At the beginning of 2023, the "disappearance" incident of founder Bao Fan shook the capital market. In fact, even earlier, Huaxing's performance had already shown a significant decline. In the first half of 2022, the company's revenue fell sharply by 40% year-on-year, and the net loss reached 23 million dollars.

After experiencing high-level changes and performance fluctuations, Huaxing began to re-evaluate its positioning. In February 2024, Bao Fan officially resigned from all positions, and the new management team proposed the "Huaxing 2.0" strategy, focusing on hard technology, industrial upgrading, and globalization, attempting to downplay the traditional consumer internet label.

Under this transformation approach, Web3 and encryption assets have become the new focus for Huaxing. In June of this year, Circle's successful listing gave Huaxing more confidence. Shortly thereafter, the company announced a $100 million Web3 investment plan, focusing on stablecoins, RWA, and the cryptocurrency ecosystem.

It is worth noting that Hong Kong is currently in a stage of warming up its encryption policies and gradually improving its regulatory system. Several publicly listed companies in Hong Kong are accelerating their布局 in the encryption field and applying for relevant licenses. Against the backdrop of favorable policies and the industry's cyclical recovery, Huaxing has once again demonstrated its keen market insight.

Huaxing Capital once dominated the Web2 era with its capital operations and strategic vision. Now, they are attempting to replicate this mature approach in the Web3 space. Despite the challenges ahead, Huaxing has already begun to leave its mark in the new world of encryption.