Bitcoin broke the psychologically important price level of $7,000 a coin during Monday’s trade, but one crypto-linked stock has fared even worse than the digital asset.
Shares of Canaan, the crypto mining firm, ended the trading day in the red down more than 10% at $4.65. The Chinese company, which debuted on Nasdaq at the end of November, is a manufacturer of ASIC chips used for bitcoin mining equipment. Canaan is down nearly 50% since its initial public offering, as per CNBC data.
It’s not exactly clear what’s behind the bearish action in Canaan’s stock. Still, it has been documented that crypto-linked equities have been closely tied to the spine-tingly volatile market of digital currencies, which shed more than $6 billion in market capitalization since midnight UTC time. Bitcoin is down nearly 3% over the last 24-hours.
The Canaan Creative
Canaan Creative, known simply as Canaan, is a China-based computer hardware manufacturer. Established in 2013 by N.G. Zhang, Canaan specializes in Blockchain servers and ASIC microprocessor solutions for use in bitcoin mining.
Initially, Canaan mainly developed FPGA products based on the SHA-256 algorithm. After that, it released Avalon Blockchain ASIC. In 2018, Canaan’s 7nm chips, and K210 chips, which are based on RISC-V, achieved mass production.
In January, Canaan filed for an IPO, as reported by Bloomberg. Canaan Inc., China’s second-biggest maker of Bitcoin mining hardware, is considering listing in the U.S. after shelving plans for a Hong Kong initial public offering, people with knowledge of the matter said.
The Chinese company, which was earlier targeting to raise about $1 billion, is discussing the possibility of selling shares in New York as soon as the first half, according to the people. Deliberations are at an early stage, and there’s no certainty they will lead to a transaction, the people said, asking not to be identified because the information is private.
Beijing-based Canaan, founded in 2013, sells computer equipment under the “Avalon” brand with fast customized chips that win digital coins by solving complex math problems. It reported 1.31 billion yuan ($191 million) of revenue in 2017, according to a Hong Kong exchange filing in May.
Bitcoin Unsettling Run
The top three cryptocurrencies by market cap, Bitcoin, Ethereum, and XRP, entered a stagnation phase that extended for the past 24 days. The low levels of volatility could be a signal that these cryptocurrencies are due for some price action. The following technical analysis will explore where BTC, ETH, and XRP could be heading next.
Bitcoin has fallen 79 percent from its record high in December 2017, making it more difficult for cryptocurrency companies to attract stock-market investors and less profitable for miners to generate new coins. Bitmain Technologies Holding Co., the largest maker of specialized mining chips for the industry, and smaller rival Ebang International Holdings Inc. also filed for Hong Kong IPOs last year.
Bitcoin is trading within a descending parallel channel since the peak at nearly $14,000 on June 26. Since then, every time the flagship cryptocurrency hits the bottom of the channel, it bounces off to the middle or the top. But, when it hits the top of the channel, it falls back to the middle or the bottom.