Hong Kong Firm With Ties to Bitmain Reorganizes to Focus on Crypto Asset Management and Hedging

Newly named Metalpha has its work cut out for it, hedging an uncertain market for institutional clients.

AccessTimeIconJan 10, 2023 at 1:55 a.m. UTC
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Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

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A Hong Kong firm with ties to crypto mining manufacturer Bitmain reorganized its business to bring crypto asset management and hedging services to the forefront, as the city pushes for a comeback in the digital asset space.

In the past year or so Hong Kong has lagged behind its peer cities, like Singapore and Dubai, due to concerns over its regulatory landscape and the influence of mainland China, which has banned crypto trading and mining.

However, since November authorities in the city have made their desire clear to bring Hong Kong back on the crypto map.

Against this backdrop, Nasdaq-listed Dragon Victory International Limited (LYL) is rebranding to Metalpha Technology Holding Limited, the name of its asset management and hedging subsidiary, according to a statement sent to CoinDesk.

After the rebranding, the “brand name will be much easier to be to be viewed by the client,” Metalpha founder and CEO Adrian Wang told CoinDesk. Essentially, investors and clients will be able to easily recognize the Metalpha financial services on the Nasdaq ticker, as the company pushes more into the crypto space.

Dragon Victory was initially offering crowdfunding services out of Hangzhou, China, and later pivoted to supply chain management before finding its way to blockchain in 2021.

Metalpha, which offers asset management and hedging services, is a limited liability company, 49% of which was owned by Bitmain-tied financial services firm Antalpha, and 51% of which was owned by Meta Rich Limited, which in turn was 100% owned by Dragon Victory International.

Bitmain is the world’s largest manufacturer of bitcoin mining rigs.

Following the restructuring, Metalpha will become a wholly owned subsidiary of the listed company, which in turn will be renamed to Metalpha Technology Holding Limited (MATH). Antalpha is also an investor in the listed company, but it did not disclose the specific share it owns.

The two companies work closely together and that won’t change after the restructuring, Wang said.

Through its partnership with Antalpha, Bitmain has been expanding its reach into financial services, on top of its mining offerings like machines and cloud mining services. Its involvement in Metalpha not only enables it to be an investor in asset management and hedging space, but to use their products, too.

Customer base

Antalpha is also Metalpha’s largest customer, bringing in “over $100 million” in assets, Wang said.

Antalpha did not respond to CoinDesk’s request for comment on this report.

Metalpha offers hedging services to institutional clients, about 20%-30% of which are mining firms, and the rest are other institutional investors like family offices, Wang told CoinDesk. The firm doesn’t serve clients in mainland China.

“Because of the current market situation,” new entrants to the crypto market are “kind of hesitant,” Wang said; they either start with small trades as a test, or they open an account and wait for their preferred market conditions. So Metalpha is focusing on existing clients, mostly from the crypto space who are “very hungry for hedging solutions because they lost a lot of money [in this bear market]. Some of them are afraid that if the market continues to behave like this, they need to protect themselves,” he said.

However, even the cost of hedging can be prohibitive for some firms at the moment. “It's more like saving people that haven’t drowned yet,” said Wang.


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Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.

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Eliza Gkritsi is CoinDesk's crypto mining reporter based in Asia.