ASIC Builder Canaan Considering US IPO After Hong Kong Filing Rejected

Colin Muller

Canaan Creative, a producer of application-specific integrated-circuit cryptocurrency miners (ASICs) and competitor to Bitmain, is considering conducting an Initial Public Offering (IPO) in the US after its IPO application to the Hong Kong Stock Exchange (HKEX) lapsed and was therefore rejected by default. Bloomberg reported the news today citing insider sources.

The China-based ASIC firm is in talks to “[sell] shares in New York as soon as [H1],” according to Bloomberg. Canaan had hoped to be trading on the HKEX by July 2018, after filing in May.

CryptoGlobe reported in November that Canaan’s IPO application in Hong Kong had expired to no result, despite backing from big names such as Morgan Stanley, Deutsche Bank AG and Credit Suisse Group. The firm had to continuously adjust its raising targets down, first from $2 billion to 1$ billion, then to $400,000.

An anonymous source, cited by CoinDesk, claimed that the HKEX was tepid on crypto-related businesses because of the industry’s youth and volatility, and that this coolness was causing delays in application approval. The source added that “The HKEX doesn’t want to be the first exchange in the world to approve [an ASIC producer] and have [it] die on them”

The three largest ASIC producers - Bitmain, Canaan and Ebang - had all filled for IPOs in Hong Kong during 2018. Bitmain’s and Ebang’s prospects for approval are not much better.

Success in the US?

The South China Morning Post (SCMP) recently reported that the HKEX, briefly an attractive IPO destination for Chinese tech firms after a 2018 reform of its listing rules, is rapidly waning in popularity in favor of US listing.

This is apparently due to the poor market performance of tech companies listed in Hong Kong, below expectations. Analysts cited by the SCMP claim that the US has a “a deeper investor base for technology companies,” and that IPOs there could be smaller and still succeed.

Canaan reported $191 million of revenue in 2017, according to its HKEX filing - far dwarfed by Bitmain’s $2.5 billion revenue during the same period.

Billionaire Tim Draper: Only Criminals Will Use Fiat Money, As Cryptos Will Hit Mainstream in Next Few Years

Legendary billionaire venture capitalist, Tim Draper has predicted that in the next five years, fiat currencies will only be used by those involved in illicit activities.

According to the well-known bitcoin (BTC) bull, cryptocurrencies will achieve mainstream adoption within the next few years - while fiat money will mostly be used by criminals. Draper’s comments came during an interview (on February 18th) with Fox Business in which he told the financial news outlet that cryptocurrency transactions can be tracked easily through block explorers.

Draper, who acquired 30,000 bitcoins during a US Marshals Service auction (after they had been seized from Silk Road’s black markets), remarked:

The criminals will still want to operate with cash, because they catch everybody who is trying to use Bitcoin.

Last year in August, an agent working for the US Drug Enforcement Administration (DEA) had said that it was easier for her department to monitor cryptocurrency transactions - when compared to illegal deals conducted using fiat money. The agent had explained that block explorers provide advanced tools which allow government agencies to accurately track crypto transactions on the blockchain.

During his latest interview, Draper also mentioned that he thinks the fiat money in his bank account is not as secure as his cryptocurrency holdings. According to the business tycoon: 

My bank is constantly under a hack attack.

"A Lot" Of Money Invested In Digital Assets

However, Draper pointed out that the Bitcoin blockchain is highly secure - as nobody has been able to hack it. Going on to compare liquidating bitcoin with exchanging gold for shells, the entrepreneur argued that cryptocurrencies would play a key role in the future economy. Although Draper did not disclose exactly how much of his investments are allocated to digital assets, he said “a lot” of his portfolio was focused on cryptocurrencies.

Notably, Draper is not the only prominent investor who has expressed confidence in crypto-based investments. Jeremy Gardner, the co-founder of Augur, a decentralized prediction markets platform, has also said that the fiat-based financial system can more easily be exploited (compared to crypto) by those involved in illegal activities.

Draper Sticks To His $250,000 BTC Price Prediction

In November 2018, Tim Draper reaffirmed his stance that he believes the bitcoin price will skyrocket to $250,000 by 2022. Draper, who is the founder venture capital firm Draper Associates, stated during a panel discussion on November 6: 

Believe it, it’s going to happen – they’re going to think you’re crazy but believe it, it’s happening, it’s going to be awesome!

Draper’s remarks were in reference to the price of bitcoin reaching a quarter of a million dollars in the next 3 years. After recording all-time highs of nearly $20,000 on December 17th, 2017, bitcoin’s value has dropped considerably to currently below $4,000 - according to CryptoCompare data.