Category Archives: Canaan

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Bitcoin Mining Rig Maker Canaan Seeks $100 Million US IPO

Canaan, a Bitcoin mining technology manufacturing company based in Hangzhou, China, is aiming to become the first public company in the cryptocurrency mining sector via a USD 100 million initial public offering (IPO) in the United States. This is according to an amended application filing submitted to the Securities and Exchange Commission (SEC). The USD 100 million IPO price is actually a downward revision from an IPO price of USD 400 million when the application was first submitted to the SEC in late October.

Canaan is the second-largest manufacturer of cryptocurrency mining rigs and is the primary rival of Bitmain. Aside from producing mining technology, Canaan also produces artificial intelligence (AI) technology and supercomputers.

Notably, Canaan has tried before to go public via an IPO in both China and Hong Kong. These attempts were rejected by regulators due to market uncertainty. Likewise, Bitmain has tried to launch an IPO as well, but the 2018 crypto bear market caused its application to be rejected.

It remains to be seen if the SEC will accept Canaan’s application, and the IPO price may be lowered further before a final listing occurs, especially because regulators are more likely to approve the IPO if it raises less money since that is equivalent to less risk for investors.

 

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New US Trade Tariffs Will Hit China’s Mining Hardware Makers

New US trade tariffs aimed at China will have a significant impact on the profits of crypto mining equipment manufacturers.

Chinese cryptocurrency mining hardware maker Bitmain stands to be the hardest hit by these new tariffs as its Antminer S9 gets reclassified by the office of the United States Trade Representative as “electrical machinery apparatus” which will now incur a 2.6 percent trade tariff.

The reclassification of mining gear from their original status as “data processing machines” also brings crypto mining hardware into another goods category which will add a further tariff of 25 percent, bringing the new tariff total from zero to 27.6 percent overnight.

The new tariffs couldn’t be worse timed for China with mining gear giant Bitmain, along with two of the world largest manufactures of crypto mining equipment, Canaan and Ebang International, all filing to list on the Hong Kong Stock Exchange. Bitmain filed in September and is waiting to hear the outcome which could result in raising $3 billion. An executive at consultancy firm Quinlan & Associates explained:

“The marked decline in the price of bitcoin since the start of the year is likely to weigh on investors’ interest in these companies… [Yet] the fall in the price of bitcoin from its peaks has not been matched by an equivalent fall in the numbers of people mining it.”

Ben Gagnon co-founder of LuTech, a bitcoin mining hardware developer suggested that there had been increased activity in the mining sector over the past 18 months, but feels that the impact of the new tariffs will start to kick in:

“All manufacturers of mining rigs based in China will likely be affected by the tariff code change and, in turn, be captured by the US trade tariff.”

Bitmain’s IPO prospectus claimed that overseas sales made up for 51 percent and 51.8 percent of its revenue in 2016 and 2017 respectively,  but neglected to stipulate exactly where the majority of these sales were concentrated. Canaan’s and Ebang International’s overseas sales represented 8.5 percent and 3.8 percent of their total revenue in 2017 respectively.

Bitmain has had little to say on the possible effect of President Trump’s trade tariffs, but Mark Li, the senior analyst at Sanford C. Bernstein, thinks that the company’s concerns that its technology is falling behind its competitors are likely to be their major focus.

A statement, prepared for Bitmain’s IPO, simply warned that changes in tax rates “due to economic and political conditions” may impact on the company’s financial status.

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Canaan Crypto Mining TV Launched to Catch Bitmain’s Market

The so-called world’s first ever crypto mining TV has just been born, courtesy of the one of the largest makers of Bitcoin mining equipment, Canaan Creative.

South China Morning Post has reported the launch, which the company has stated is a step towards creating a new generation of devices which are linked to blockchain and IoT.

The device is marketed as a smart TV with a difference, enabling the user to tap into a processing output of 2.8 trillion hashes per second. Given that a made-for-purpose rig manufactured by the company can process 11 trillion hashes per second, this is still pretty significant for a TV.

The device is marketed as “AvalonMiner Inside”, although how the company connects their new device to the mystical isle associated with Glastonbury is anyone’s guess. Miners though, if not impressed by the name, will certainly have much to marvel at, according to Canaan. Such features as voice control, real-time Bitcoin mining profitability display and a digital tether to Canaan’s platform allowing users to pay for extras using mined coins.

The project has received some scorn, notably from Bitcoin analyst Xiao Lei who said: “It looks more like hype. It will be more meaningful if these companies are able to embed the mining function into existing major TV brands.”

There is absolutely nothing to say that this may be the way the future takes media hardware.

Canaan applied for an Initial Public Offering (IPO) earlier this year in Hong Kong with the hope of raining in a significant starter fund. At present, Canaan needs to keep one eye on its competitor Bitmain which at present has a huge 70% of the global Bitcoin mining device market. When the company applied for the IPO it stated:

“If we cannot maintain the scale and profitability of our single line of system products and, at the same time, offer new products, our ability to continue to grow will suffer.”

To this end, the company has expressed that it intends to follow up AvalonMiner Inside with further innovations, and break away from simply manufacturing mining chips.

 

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