Kaixin Holdings, a Chinese EV company, is entering cryptocurrency mining with plans to acquire a Middle Eastern operation. This step reflects China’s gradual return to the crypto market after previous bans.
Kaixin Holdings, known for its electric vehicles, is expanding into cryptocurrency mining by acquiring a Middle Eastern operation. The EV maker noted the cost-efficient Bitcoin machines and reliable energy supply as essentials for profitable mining. The company expects to focus on the crypto market while maintaining its focus on the automotive industry by transferring its expertise in sustainable operations into the new venture.
Kaixin’s mixed market performance
Kaixin’s recent market performance raises questions among shareholders. High on the list is its ability to add mining to its operations as the company faces an 81% decline in top-line performance over the last year.
However, Kaixin’s medium-term annualized growth rates still outpace the broader industry, which is expected to grow by only 4.3% in the coming year. Its price-to-sales (P/S) ratio aligns with industry averages, suggesting that investors remain cautious about its ability to maintain its past growth trajectory.
Against this backdrop, Kaixin’s move into cryptocurrency mining could impact its growth potential. The acquisition could be a move to diversify the company’s portfolio by leveraging the momentum of the global cryptocurrency industry, which recently surpassed a $3 trillion market cap.
China’s re-entry into crypto
Kaixin’s decision is part of a larger trend developing in China. Despite its 2021 crackdown on Bitcoin mining and trading, Chinese companies are now re-entering the crypto space as the market grows.
Other firms like Nano Labs are exploring blockchain technology, digital currencies, and international crypto payments. While the Chinese government still restricts domestic crypto trading, it supports blockchain innovation. It has also pushed forward the development of its digital yuan (e-CNY).
Kaixin’s pivot into crypto mining represents not just a diversification of its business but also a reflection of China’s broader shift toward embracing cryptocurrency. The company’s transition into Bitcoin mining could mark a new phase in China’s shift from banning Bitcoin to actively participating in the industry.
China is careful with crypto on the domestic level, but its international moves show it understands the value of cryptocurrency.
Source: https://www.cryptopolitan.com/chinese-ev-company-kaixin-mining-bitcoin/