Bitmain Hardest Hit ASIC Producer In China-U.S. Trade War

The U.S.-China trade war could begin taking casualties in the cryptoasset industry, as a change in the U.S. classification of application specific integrated circuit (ASIC) miners could increase tariffs significantly for Chinese producers.

The South China Morning Post (SCMP) has reported that a change on August 28 of the classification of ASICs could hike import duties on ASIC miners from 2% to 27%. Hopes have recently been doused that cooler heads would prevail in the largely Trump-initiated conflict, which has flouted previous conventions of addressing trade grievances through the World Trade Organization (WTO).

Bitmain could be the worst hit of Chinese producers, as it has the highest proportion of foreign exports. Bitmain’s IPO filing, released last month, revealed that 62.8% of the Beijing-based company’s total revenue during the first half of 2018 came from overseas sales - although this data did not specify how much came from U.S. sales specifically. The vast majority of Bitmain’s revenue comes from ASIC production, about 94%.

The SCMP reports that Bitmain competitors Canaan and Ebang have drastically lower overseas sales proportions, suggesting they will be less vulnerable to tariffs.

Bitmain is well aware of the risks to its business model entailed by overseas sales, citing specifically in its IPO filing “governmental policies favoring domestic companies in certain foreign markets or trade barriers including export requirements, tariffs, taxes and other restrictions and charges”, in particular “the worldwide populism trend that call [sic] for protectionism trade policy and potential international trade disputes”.

This new threat to Bitmain’s business model comes at a bad time for the compnay. Details revealed in the IPO filing showed that the company’s profits fell precipitously in Q2, along with the general tumble in cryptoasset prices since January. Depite an impressive $1.1 billion profit in Q1, Q2 turned a loss of around $400 million.

Many have speculated that the IPO is an emergency measure to plug hemorrhaging profits, amid falling cryptoasset prices and increasing competition.

Jihan Wu, one of Bitmain’s founders, has been a well known supporter of the Bitcoin fork, Bitcoin Cash. The fact that the company holds a significant quantity of the altcoin has been seen by some as a liability.

$1.5 Billion Hedge Fund Ulysses Capital Invests in NULS (Again)

NULS, a blockchain designed to enable customizable modules and cross-chain operability, has secured investment from Ulysses Capital, a Los Angeles-based family office managing roughly $1.5 billion worth of assets.

Commenting on his fund’s investment in a blog post published by NULS was Joon Lee (Fund Manager, Ulysses Capital), who praised NULS’ “strong technical team” for sticking to their roadmap; something “we don’t often see” occur in the crypto space, he added.

If anyone was to know how diligently NULS abides by their roadmap, it would be Ulysses Capital. Indeed, the investment into the enterprise- and developer-focussed blockchain project was not the first for the long/short hedge fund.

It was only last October when Ulysses Capital – who at the time had “recently established a crypto fund to invest in cryptos and blockchain companies” – invested directly into NULS’ same-named cryptocurrency.

For Ulysses Capital, the initial investment into NULS doubled as a strategic partnership. According the October announcement, Lee shared his fund’s intention was to “build a win-win relationship with [NULS] by creating more opportunities for NULS in the future.”

NULS Seeing A Lot of Investment

Notably, Ulysses Capital is not the only crypto-specific fund in recent times to have seen potential value in NULS. Late last month, BlockGroup, the parent company of the BlockVC, announced their investment in NULS through its newly established $200 million crypto fund. As was the case with Ulysses Capital and their crypto-specific fund, NULS represented the first investment by BlockGroup’s.

As for how NULS is tracking as a project, the team is currently testing their recently released alpha version of NULS 2.0. Promisingly for investors such as Ulysses Capital and BlockGroup, NULS revealed in today’s investment announcement it “has multiple enterprises and individuals participating in the 2.0 alpha test and is currently considering additional participants to join the environment.”

Announced last November, NULS 2.0 represents a “new modular architecture enhanced with microservice suites, that have no programming language limitations.” Prompting the design overhaul was the core team’s realization that, whilst NULS 1.0 achieved “the modular effect at the coding paradigm level,” it was far too constraining for developers. For CryptoGlobe readers wanting to learn more about the benefits of NULS 2.0 – especially as it relates to NULS 1.0 – we recommend reading this detailed blog post.