Blockchain technology features the ability to get rid of third parties that confirm transactions. Miners are used in order to confirm transactions. And for this reason, many are looking to invest in cryptocurrency mining.
Canaan is set to have an upcoming $1 billion IPO. Canaan is a company best known for its Bitcoin mining equipment line Avalon. The company has been able to secure 15% of the entire crypto mining market share worldwide.
Canaan is a China-based company that is about to complete a $1 billion initial public offering later this year. Among its supporters include Morgan Stanley, Deutsche Bank, Credit Suisse Group AG, and CMB International Capital.
One of the things that made Canaan standout in the market is its affordable equipment. It has appealed mostly to large-scale mining pools in different parts of the world including West China, Canada, and Norway. These are areas with cheap electricity mainly because of its clean energy.
Though it was originally planned to have an IPO in China, the company decided to sustain its global brand outside of Asia. In addition to this, there are also other companies that have stepped away from China mainly because of the increasing scrutiny by Chinese authorities on the crypto market.
IPO in China
The company originally wanted to have an IPO in 2016 during the time when the entire crypto market was still in its infancy. However, a regulatory deadlock stopped this initial plan by the company. And with its crackdown on Bitcoin, IPOs in China could take a longer period of time before it materializes.
In 2017, things got worse as Chinese government declared a total ban on crypto trading and investments. It also stopped the services of crypto exchanges. A good number of analysts think that this move by China is mainly because of its fear regarding capital control leaving towards the US.
Canaan’s Competitor Turning Into AI
Bitmain is the main competitor of Canaan. However, Bitmain’s Jihan Wu already talked about his plans to turn into AI. In 2017, Bitmain was able to generate $3.5 billion in revenue. Unlike its close competitor, Jihan Wu, the CEO of Bitmain explained that “We are just trying to do something that they cannot take care of well enough”, talking about the graphics cards in the industry. This is considered a smart move for the company considering how China is banning mining.
In fact, the discovery of possibly stolen mining hardware was found in China because of the effort of the government in order to stop mining operations.
Though mining has several issues including the recent study regarding its environmental impact, many are still looking to become a miner. In fact, there are several studies in South Korea and Japan saying that it is a better investment to go for mining equipment and earn cryptocurrencies rather than directly investing in digital currencies such as Bitcoin and Ethereum.
There are many players in South Korea today that are running their cloud mining software on their GPUs and ASIC miner racks. Their strategy is to produce altcoins with small market capitalizations but with great potential.