Canaan Creative was the first major mining hardware manufacturer to achieve an IPO in the US. However, the consequences do not seem very positive, as the share price fell by 35%.
The share price slump occurs “as bitcoin miners face a difficult environment,” research firm TradeBlock wrote in a report last week.
According to data provider FactSet, Canaan stock developments did not attract the attention of analysts at Wall Street brokerage firms. This forced investors to generate their own models of company profitability, based on crypto industry metrics. For example, they have taken into account the evolution of the hash rate of the Bitcoin network.
In the last two months, the hash rate has remained around 97 ETH / s, stopping from this year’s accelerated growth.
Industry executives say large mining equipment manufacturers are slowing sales. This is a surprising evolution, as many observers have predicted a frenzy of updates before halving the bitcoin mining rewards, scheduled in May.
Bitcoin miners are facing price developments
It is expected that previous generation mining platforms will become unprofitable for operators.
Matt D’Souza, co-founder and CEO of Blockware Solutions, a mining equipment broker, believes miners are reluctant to invest in new cars until they see signs that bitcoin prices may start to rise.
“You have to make sure they are in an environment for long-term profitability. That is why some of them stopped buying ”,
In addition, Canaan is competing with Bitmain. The AvalonMiner 11 series is scheduled for launch early next year. Unfortunately, these models are less energy efficient than the previously launched Bitmain S17 +.