Jiuzi's Billion-Dollar Gamble: A Chinese EV Firm's Shock Pivot to Crypto

HANGZHOU, China – December 12, 2025 – In a move that sent shockwaves through microcap and crypto-focused trading desks, Jiuzi Holdings, Inc. (Nasdaq: JZXN) announced it has signed a Memorandum of Understanding (MOU) to expand a private placement to a staggering US$1 billion. The news, which represents an 80-fold increase from a modest $12 million plan floated just two months ago, ignited the company’s stock, which surged as much as 90% in pre-market trading.

This isn't just another funding round; it's the financial fuel for one of the most audacious corporate reinventions in recent memory. Jiuzi, a company whose roots are in franchising electric vehicle showrooms in China's lower-tier cities, is attempting a full-throttle pivot into the high-stakes world of crypto asset services. The proposed billion-dollar war chest is earmarked for building secure custody infrastructure and pursuing acquisitions, a bold declaration of intent to compete in a technically demanding and fiercely competitive global market. The question for investors is whether this is a visionary leap or a speculative fever dream.

From Electric Vehicles to Digital Vaults

To understand the magnitude of this shift, one must look at what Jiuzi is leaving behind. Founded in 2017, the company's original mission was squarely in the tangible world of new energy vehicles (NEVs). Its business involved operating retail stores for electric cars and developing charging infrastructure, complete with a proprietary “Smart Energy Cloud Platform.” It was a story aligned with China's broader strategic push into green transportation.

Yet, its financial performance painted a picture of a company struggling for traction. Prior to this week's announcement, Jiuzi was a microcap company with a valuation hovering below $10 million, its stock having plummeted over 90% in the past year. Against that backdrop, the planned pivot is less a strategic evolution and more a corporate rebirth. The company is trading the business of batteries and chassis for Bitcoin and blockchain.

This transformation began in earnest in September 2025, when Jiuzi’s board approved a new Crypto Asset Investment Policy, authorizing the company to place up to $1 billion of its cash reserves into cryptocurrencies like Bitcoin and Ethereum. It was a clear signal of a new direction, but today’s announcement of a potential billion-dollar capital injection from institutional backers transforms the narrative from a treasury management strategy into a full-blown operational overhaul.

Mr. Tao Li, Jiuzi's CEO, stated in the press release that the commitment “validates our strategic vision and execution capabilities.” He highlighted the “significant financial flexibility” the funds would provide. But for a company transitioning from car sales to cryptographic security, the challenges of execution cannot be overstated.

A Bet on Institutionalization

The unnamed institutional investors behind the MOU are making a powerful statement, not just about Jiuzi, but about the maturation of the digital asset class. The crypto custody market is no longer a niche corner of the internet; it's becoming critical financial infrastructure. Global market estimates project the sector to grow from over $3 billion in 2025 to nearly $8 billion by 2032, driven by the relentless march of institutional adoption.

Established giants like BNY Mellon and Fidelity Digital Assets are now competing with crypto-native titans such as Coinbase Custody, Fireblocks, and BitGo. These firms provide the secure, regulated, and insured “digital vaults” that hedge funds, corporate treasuries, and asset managers require before deploying serious capital into cryptocurrencies. They offer complex services like multi-signature cold storage, multi-party computation (MPC) wallets, and seamless integration with trading venues.

Jiuzi’s ambition to enter this arena is a bet that the demand for these services will continue to outstrip supply, creating room for new players. The billion-dollar funding, if it materializes, would theoretically allow the company to bypass years of organic growth and acquire the technology and talent needed to compete. The strategy appears to be one of buying, not just building, its way to relevance in a market where trust and technological prowess are paramount.

The Great Wall of Regulation

Perhaps the most significant risk factor in Jiuzi’s plan is its home address. The company is headquartered in Hangzhou, China, a country that has enacted one of the world's most stringent crackdowns on cryptocurrency. Since 2021, the People's Bank of China has declared all crypto-related transactions illegal, banning everything from mining and exchange trading to the simple act of holding digital assets.

So how can a Chinese-based company publicly announce its intention to build a crypto custody business? The answer may lie in the nuanced distinction Beijing draws between speculative crypto trading and the underlying blockchain technology. While financial activities involving crypto are forbidden, the government continues to champion blockchain innovation. Jiuzi’s focus on “infrastructure” and “storage solutions” may be a calculated attempt to position itself on the permissible side of that regulatory line.

Another possibility is an international strategy, leveraging its Nasdaq listing to operate primarily outside of mainland China. The nearby example of Hong Kong, which has cultivated a regulated crypto market under its “one country, two systems” framework, offers a potential template. However, even this path is fraught with peril, as Beijing has recently shown a willingness to extend its influence and curb activities in the special administrative region that it deems a threat. Navigating this complex and shifting regulatory landscape will be Jiuzi's single greatest challenge.

For now, the market is trading on pure potential. The stock’s wild volatility reflects the binary nature of this venture: it will either be a spectacular success, creating a new force in the digital asset economy, or a cautionary tale of a company whose ambitions outstripped its capabilities and the geopolitical realities it faced. The billion-dollar question remains: who are the investors willing to back this gamble, and do they see a path through China's regulatory maze that others have missed?