Cryptocurrency mining machine manufacturer Canaan made the headline last month by being one of the first cryptocurrency companies to tap into the public markets, but an expert said its initial public offering (IPO) may be “more symbolic” than substantial.
In a recent The Scoop podcast, Iterative Capital Management principal Leo Zhang acknowledged the firm’s IPO as a “big milestone” for the industry overall, but also noted that its influence in the cryptocurrency industry might eventually wade.
Zhang pointed out that although mining is one of the Canaan’s two major business lines, with the other being AI chips, the firm’s focus is on circuit design instead of being a fully integrated cryptocurrency company. As its technology falls behind that of Bitmain and Whatsminer, over time Canaan’s influence will wade “despite that it has a huge seat,” said Zhang.
According to its IPO filing, Canaan now controls around 23% of the global mining machine market share. In November, it raised $90 million in its underwhelming IPO, slashing its original $400 million fundraising goal by 77.5%.
“I don’t really think this requires them much validation from equity investors. It’s–at this point, I think U.S. tech stock market is just as inflated as a cryptocurrency market. In terms of sentiment, not in terms of quantity,” said Zhang.
Meanwhile, Bitmain is ramping up its sales strategy globally to fortify its market share dominance. The firm is now reportedly seeking co-mining opportunities with mining farms and it also provides clients put options to sell pre-ordered mining machines at a set price and date.
Canaan’s IPO is “more symbolic” than substantial to the crypto industry, says expert written by Celia Wan @ https://www.theblockcrypto.com/linked/50015/canaans-ipo-is-more-symbolic-than-substantial-to-the-crypto-industry-says-expert?utm_source=rss&utm_medium=rss December 11, 2019 Celia Wan