Ebang International Holdings Inc [NASDAQ:EBON] has been on an uptrend since August. The rally was triggered by the company’s announcement that it had formed a wholly owned subsidiary that would be used to a run a crypto exchange in Singapore.
At the time, CEO Dong Hu state that with the new subsidiary, the company would expand its chain layout by including trading services in its portfolio of products. He added that with the introduction of trading services, the company would deliver value to shareholders. From an investor perspective, by taking this move, the company’s growth prospects increased exponentially. Here’s why:
By taking the move to diversify its income from bitcoin mining equipment, the company was lowering its chances of revenue fluctuations in the long run. Bitcoin mining equipment tends to fluctuate in demand depending on the price of Bitcoin.
On the flipside, cryptocurrency trading is not seasonal and offers a good revenue stream for the company. This stability adds to the company’s intrinsic value long term and the same would reflect in the company’s value in the long run. As such, investors are likely to keep bidding up the price to reflect the improved fundamentals, as has been seen in its price action over the last month.
Singapore as a market
The Asian crypto market is one of the largest and most active in the world. Singapore also happens to be one of the bigger and more developed crypto markets in the region. In essence, by setting up the company in Singapore, it was positioning itself in a market that has a high potential for growth in one of the world’s most important crypto markets. This will give it a healthy growth rate in the long run.
This is driving up the stock price in the short-term and is likely to influence its price momentum in the long run. It makes it a high growth stock even after its recent rally that has lasted a month.
Improved Bitcoin prices
Despite the volatility, the price of Bitcoin is still edging higher, and is now firmly above $10k. This means that miners are making profits, and the demand for mining equipment is likely to keep rising. This means that the company’s prospects in the bitcoin mining market are getting better. This development further adds to the intrinsic value of the company and growth potential long-term.
About Ebang International Holdings Inc
Ebang International Holdings Inc makes and distributes bitcoin mining equipment. It is based in Hangzhou, China.