The shares of the BTC miner producer Canaan recently crashed by 40% on Nasdaq, which was probably caused by the unceasing pressure on Bitcoin (BTC) price. In our Bitcoin news now, we take a closer look at the analysis of the crash.
Bitcoin miners are in a bad place once again, as the price of Bitcoin (BTC) suffers pressure continually. Miners were known to leave the mining sector when the price dropped in 2018 because it was not sufficiently profitable for their appetites. These days, the hardships of the mining activity are growing, while the price is struggling to remain stable.
With the anticipated block reward halving, scheduled for May of 2020, and the scarcity of positive price movements, many could decide to withdraw before they start suffering losses. Though, the influence of the battle about bitcoin price goes above and beyond just miners. Mining equipment makers are suffering difficulties also, with the Chinese company Canaan being the best exemplar of this. The mining equipment producer recently suffered a huge stock price crash.
The stocks of the company fall by about 40%. The company was only recently listed on Nasdaq, which made it the first-ever equipment producing company to go public on a major stock exchange. Though, less than a month later, the stock price dropped by 40%, while the trading volume from $4 million on day one, is now barely $164,000. The company also held an IPO back in November of 2019, as reported by DC Forecast when they planned to raise $100 million while the stock price was between $9 and $11. After the price crash, the stock price of the company was down at $ 5.6.
The partner from TokenInsight Jack Yang commented that Canaan could lose its market position if bitcoin price continues to fall down. This is hardly news, having into consideration how greatly the Bitcoin market influence companies that produce mining equipment. About 99% of the company current revenue comes from the mining gear. Though the BTC miner producer Canaan also offers an AI product, the demand for it is fairly low consisting of only 1% of their revenue. Bitcoin started experiencing serious price falls about the time when Canaan was listed on Nasdaq. Bitcoin continued falling through the last week, having its price fall down by about 5% in three days.
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