Gate.io Gathers $64 Million In Effort To Open New Cryptocurrency Exchange In Q4 2019
Gate.io Gathers $64 Million To Launch New Cryptocurrency Exchange
The cryptocurrency exchange Gate.io was able to raise $64 million worth of virtual currencies in seven days in order to launch a new cryptocurrency exchange. However, this platform would not be launched for at least six months.
Gate.io Oversubscribed With $2.99 Billion In Orders
The Chinese exchange Gate.oi has oversubscribed orders close to $2.99 billion for Gate Points. These points are expected to be exchanged for Gate Tokens that will reduce trading fees when the exchange will be operative. This is similar to what Binance did with is platform and the Binance Coin (BNB).
For each Gate Point, users are going to be receiving 2.5 Gate Tokens (GT). These tokens will also work as the native cryptocurrency for the exchange and its proprietary blockchain that has not yet been released to the market. According to the company, the network is expected to go live in the last quarter of this year.
In a recent blog post that the exchange published earlier in April, the first phase of the Gate Points sale started on April 8. Each Gate Point is worth 1 USDT and they could be purchased using Bitcoin (BTC), Ethereum (ETH), EOS, Binance Coin (BNB) or Huobi (HT).
Gate.io started working in 2013 with another name. The exchange was called Bter.com and it was founded by the CEO Lin Han. After the ban in Initial Coin Offerings (ICOs) that the government of China imposed, the exchange changed its name to Gate.io and decided to offer OTC services.
As mentioned before Binance has also decided to launch its own virtual currency to the market. Huobi launched its tokens as well, allowing users to pay for lower fees with the Huobi Tokens.
A few months ago started to be released Initial Exchange Offerings (IEOs). These are similar to Initial Coin Offerings but regulated by crypto exchanges. Because of this situation, exchange tokens started to grow in the market and expand at very fast rates. Binance Coin, for example, entered the top 7.
This is why Gate.io is expected to launch its own IEO platform, similar to Binance’s LaunchPad.
During a conversation with CoinDesk, Weirong Chen, an analyst from TokenInsight, commented:
“The demand is indeed correlated with the overall market condition when exchange tokens have jumped by 150 percent in Q1. Thus retail investors’ anticipation for these tokens to yield a high rate of return is still positive.”
It is worth mentioning that the interest in this token sale has caused an influx of Tether coins to Gate.io from other exchanges such as OKEx and Huobi. This created scarcity of USDT coins in these exchanges, helping USDT grow around 3%. Some investors paid as much as $1.14 per USDT when it usually trades close to $1.
GT is not issued on any public blockchain with a contact address. Indeed, this is currently a tradeable sign or just liability. The intention is to issue 1 billion of GTs, 50 percent of which would be reserved and locked up for a year in order to use them for research and development as well. They are also going to be used for marketing campaigns.
Meanwhile, 300 million will be used for users that subscribe to the trading points promoted by the exchange. These points were distributed by the platform just last week.
Gate.io has also decided to start the second phase of the Gate Point sales that will last for a week.