Bitcoin Mining Hardware Manufacturer Canaan Confirms $1 Billion IPO Filing

Jordana Sacks
  • Chinese company Canaan Creative would like to start trading as early as July.
  • The firm is seeking the first Hong Kong IPO for a cryptocurrency enterprise.

Canaan Creative, the world’s second-largest producer of bitcoin mining hardware, has recently submitted an application for an initial public offering (IPO) worth around $1 billion.

According to those in the know, the Chinese company would like to begin trading as early as July, despite the fact that the size and timing of the IPO have not yet been publicly announced.

Speaking on its earnings, Canaan Creative’s parent company, Canaan Inc., which is based in the Cayman Islands, revealed on Tuesday that the group had revenue of around $203.8 million, with its profit surging six-fold in 2017.

If Canaan Creative’s bid for the IPO is successful, this will make it the first Hong Kong IPO from the cryptocurrency industry. Some major backers appearing on the filing including Morgan Stanley, Credit Suisse, and Deutsche Bank.

Founded in 2013, Canaan sells equipment under the guise of Avalon. Specializing in fast, customized chips that help users mine cryptocurrencies by solving complex problems, it holds a 15 percent share of the global market in its sector, with its Chinese rival Bitmain just pipping it to the post.

Growing from 50 million yuan (about $7.8 million) in 2013 to 7.3 billion (roughly $1.1 billion) yuan in 2017, the country’s ASIC-based cryptocurrency mining hardware market is expected to continue expanding in the years ahead, with forecasts suggesting that its value will reach 28.8 billion yuan ($4.5 billion) by 2020.

Despite this, Canaan has no intention of simply consolidating its successes. Announcing last year that it also plans to develop dedicated chips for use in artificial intelligence applications, the company looks set to expand its market dominance further.

Prior to pursuing this Hong Kong IPO, Canaan prepared to list itself on China’s National Equities Exchange and Quotations, an over-the-counter market known as the New Third Board, last year.

CryptoQuant CEO Explains Why He Expects Bitcoin's Next Bull Run to Start in July

Siamak Masnavi

On Tuesday (June 23), Ki Young Ju, the CEO of South Korean blockchain analytics startup CryptoQuant, used on-chain data from his company's CQ.Live platform to explain why he believes Bitcoin's next bull run will start in July 2020.

Currently, the CQ.live dashboard provides an easy way to look at many on-chain metrics across nine categories: six for Bitcoin (Bitcoin Exchange Flows, Bitcoin Risk Indicator, Bitcoin Network Data, Bitcoin Miner Flows, Bitcoin Inter Entity Flows, Bitcoin Market Data); one for Ethereum (Ethereum Exchange Flows); and two for stablecoins (Stablecoin Network Data and Stablecoin Market Data).

In a Twitter thread on Tuesday, the CryptoQuant CEO focused on one of the metrics in the Bitcoin Exchange Flows catgeory. The metrics in this category provide "a way to track money moving in and out of Bitcoin markets."

CryptoQuant uses data from the following crypto exchanges: BitMEX, Binance, Huobi Global, FTX, Bybit, Gemini, Bitfinex, OKEx, Kraken, Bithumb, Coinone, Gopax, Korbit, Bitflyer, Gate.io, Coinbase, and Poloniex.

As CryptoQuant has explained several times in the past, total BTC inflows into all wallets owned by crypto exchanges tends to decrease when the price of Bitcoin is going up and vice versa, i.e. in other words, when Bitcoin whales start moving their BTC to crypto changes, it would be reasonable to assume they are doing so because they are planning to sell their BTC, which would then cause the Bitoin price to go down:

The CryptoQuant CEO used the metric Bitcoin Average Exchange Withdrawals (7MA), which is the seven-day moving average of mean outflows from all exchanges, to look at bull markets in 2018 and 2019 and show that in both cases the start of these bull markets was preceded four months earlier by this metric reaching a year-high value:

He argues that if you accept that this correlation exists, then when you look at the data for this year, you see that the seven-day mean outflows reached a year high on March 18, which means that Bitcoin's next major bull run could start around mid July:  

He then went on to show that if we look at data from 2013 to 2017, it seems to tell us that when Bitcoin whales are busy moving BTC out of exchange wallets, which tend to happen when the price of Bitcoin is going up, then we are in a "BTC accumulation phase": 

 

Featured Image by "SanFermin" via Pixabay.com