Bitcoins have shed off almost half of the value it had before the end of last year. Additionally, profits from bitcoins have dropped by 60% in 2018 than it was in 2017 and retailers of mining rigs are experiencing a drop in customers. Despite all these developments, one company seems to be looking on the bright side of everything.
Canaan Inc announces Biggest Bitcoin IPO
Canaan Inc based in Benjing has announced launched a $2 billion bitcoin-focused initial public offering. Canaan Inc is the largest supplier of cryptocurrency mining rig. This will be the largest biggest bitcoin-focused ICO. The information was revealed by two sources with knowledge of the matter.
According to the sources, the company will be presenting itself to investors more of a chip designer which is engaged in the development of blockchain and artificial intelligence. Canaan will not be presenting itself as a bitcoin but a developer of an electronic ledger which underpins bitcoin. According to the sources, the company is taking this move because, despite being a chip company, a majority of its customers are bitcoin miners.
Canaan is engaged in the production of what is called ASIC chips that are used in bitcoin mining. The company mainly serves customers with large-scale mining operations that involve several machines working together all day long.
Increasing competition has seen drop in profit
Since the development of the ASIC mining rigs, mining outfits are experiencing a lot of competition which has seen a sharp drop in the business. According to experts, revenues from mining activities have dropped by 37% in 2018 compared to what was reported in 2017. It is this drop in revenue that forced Taiwan Semiconductor Manufacturing Corporation (TSMC), the largest manufacturer of chips in the world, to scale down on its full-year sales projections. The company reduced its targets because the cryptocurrency industry is filled a lot of uncertainty.
Last year Canaan recorded a seven-fold increase in its profits to $56.67 million. The profits were mainly driven by increase in prices of bitcoin, which led to an increase in demand for mining equipment. Canaan sells its products under the AvalonMiner brand.