Sources close to MinerUpdate have confirmed that the Canaan IPO application to list on the NASDAQ exchange has been approved by the SEC and is set to take place in November. Details have yet to be officially confirmed but it is believed that the Canaan team will ring the bell of the NASDAQ stock exchange on the 20th of November.

CANAAN IPO INTENSIFIES HARDWARE MARKET COMPETITION

Hongzhou-based Canaan officially filed an IPO application with the SEC on the 28th of October. The Canaan IPO intends to raise $400 million and list under the ticker symbol CAN.

Competition in the hardware market for Bitcoin ASIC mining machines will intensify with the Canaan IPO set to raise $400 million. Canaan is currently the second-largest designer of Bitcoin ASIC mining machines globally with an estimated market share of 23.3%.

Bitmain currently holds the dominant share of the market with research in the Canaan IPO filing estimating their share to be 64.5%. In their IPO application to the SEC, Canaan noted Bitmain’s access to funding as a key advantage that Bitmain has held to date.

“Bitmain has raised multiple rounds of financing from investors and therefore has established certain funding advantages over us. Given that the leading IC foundry, namely TSMC, typically has limited production capacity and reserves such capacity for customers who are able to make prepayments first, Bitmain has been able to reserve more production capacity by relying on its funding advantages to offer larger amounts of prepayments” (p. 106)

Pavel Moravec, co-founder of Slush Pool, also noted the extraordinary demand for chips to produce Bitcoin ASIC hardware. Noting that “the whole world strives to increase hashing power”, financing certainly plays an important role for ASIC designers in securing sufficient chips from foundries to meet market demand.

It has been evident this year that market demand for Bitcoin ASICs has far outstripped the amount of chips Bitcoin ASIC designers such as Canaan can secure. This has resulted in latest-generation mining hardware trading at significant premiums on the secondary market which has been highlighted from data provided by mining hardware broker Blockware Solutions.

BITMAIN IPO TO FOLLOW?

Since the Canaan IPO application, it has been rumoured that Bitmain has privately applied to list. Bitmain may be concerned about their market share of the Bitcoin ASIC hardware market diminishing after the Canaan IPO.

Bitmain co-founder Jihan Wu recently acknowledged that their “mining equipment’s market share is declining”. Their share of the hardware market was estimated to be 77% in 2017.

Bitmain IPO rumours has only been one development placing the firm in the headlines. Jihan Wu returning and coordinating the dismissal of co-founder Micree Zhan highlighted turbulence unwrapping at the firm while the detainment of MicroBT founder Zuoxing Yang has also been linked to Bitmain.