Plans by bitcoin mining equipment manufacturer Canaan to list shares on the Hong Kong stock exchange are now uncertain, as the Chinese company’s application for an initial public offering (IPO) expired on Nov. 14 — exactly six months after it submitted the documents to the Asian bourse.
Canaan’s $400 million IPO may “not happen this year as there was no update from the stock exchange for a listing hearing,” according to a report by Reuters, quoting sources familiar with the matter.
The Hong Kong exchange has released a report on IPO applications, delistings and suspensions that shows that more than 200 applications have lapsed before they were finalized. The report does not identify any of the applicants by name.
The Hong Kong exchange has released a report on IPO applications, delistings and suspensions that shows that more than 200 applications have lapsed before they were finalized. The report does not identify any of the applicants by name.
Regulators in Hong Kong, including the stock exchange itself, have reportedly raised concerns about Canaan’s business model and future prospects. The company — based in the “Silicon Valley Bright City” area in northwestern Beijing — controls approximately 15 percent of the global market for bitcoin mining chips and computer equipment. It ranks second only to Chinese rival Bitmain, according to a report from Stanford C. Bernstein & Co. that was released in February.
However, Canaan has tried to portray itself to investors as a chipmaker rather than a dedicated bitcoin company, Reuters said. It has claimed that it is more interested in other areas, beyond the cryptocurrency space, that are related to blockchain technologies and artificial intelligence. The idea was to assuage regulatory concerns around the perceived financial risk posed by companies in the cryptocurrency industry.
The Hong Kong stock exchange is currently looking at Bitmain’s IPO application. The Chinese company filed the documents in September.
Future Listing Still Possible
According to Reuters, the expiration of Canaan’s application does not mean that the Chinese manufacturer’s plans to move forward with an IPO — initially valued at $1 billion — are completely dead. The company, which had roped in Morgan Stanley, Deutsche Bank AG, Credit Suisse Group AG and CMB International Capital as joint sponsors of the offering, can still apply again with updated financial information and take things from there.
However, this is not the first time that Canaan has failed to follow through on a planned share offering. In 2017, the chipmaker was getting ready to list on China’s National Equities Exchange and Quotations — an over-the-counter market known as the New Third Board — but had a change of heart at the last minute and opted to pursue a listing on the Hong Kong stock exchange instead.
The lapsing of Canaan’s latest IPO application comes barely a month after the Securities and Futures Commission of Hong Kong announced that it would bring crypto-assets such as bitcoin further within its regulatory oversight. The regulator plans to impose licensing conditions on investment firms that have managed or intend to manage portfolios that invest in crypto-assets, regardless of whether such assets constitute securities or futures. It has said that it plans to do so “in light of the significant risks virtual assets pose to investors.”
Canaan, which was founded 15 years ago, manufactures and sells computer equipment under the Avalon brand, with customized chips specially designed for mining cryptocurrency. The company’s hardware often ends up in remote locations housing large mining pools that depend on cheap electricity. Canaan posted 1.3 billion yuan ($205 million) of revenue in 2017, representing a sharp 3,000 percent increase from its 2016 results. Net profit increased sixfold to $56 million.
What do you think about Canaan’s listing prospects? Let us know in the comments section below.
Canaan’s Hong Kong Listing Plans in Limbo
By Hyan Furtado
Coinmine is a new startup that aims to make in-home mining accessible for non-technical users, based in Los Angeles and founded by Farb Nivi and Justin Lambert. The company has reportedly raised about $2 million from VC funds and angel investors such as Coinbase Ventures and Tinder Chief Product Officer Brian Norgard.
Coinmine’s debut device went on sale on Wednesday, featuring a 4 GB AMD RX 570 GPU, Intel Celeron CPU and 8 GB DDR4 RAM. It also consumes just 120 watts, which is less than a Playstation, according to the developers. The Coinmine One retails for $799, but the company takes a 5 percent cut for itself from the mining proceeds.
Coinmine has raised a combined total of $2 million in funding to date. The company is backed by funds such as Coinbase Ventures, Social Leverage, Wonder VC and Arrington Capital, as well as angel investors including Tinder’s Norgard, Balaji Srinivasan, Anthony Pompliano, Ryan Hoover, Josh Jones, Penelope Linge and Tom McInerney.
$799 Plug and Play Miner
Coinmine’s debut device went on sale on Wednesday, featuring a 4 GB AMD RX 570 GPU, Intel Celeron CPU and 8 GB DDR4 RAM. It also consumes just 120 watts, which is less than a Playstation, according to the developers. The Coinmine One retails for $799, but the company takes a 5 percent cut for itself from the mining proceeds.
Aiming for ease and simplicity, users only need to plug the device into a source of electricity, open an accompanying mobile app and choose the assets they want to mine. From there, the Coinmine mobile app controls and keeps track of the device from anywhere. Users can see how much they have earned, change to other cryptocurrencies or add additional devices to their accounts from a centralized dashboard.
“Crypto is not just about buying and selling magical internet coins,” said Nivi, the CEO of Coinmine. “It’s about people combining computation to decentralize the world’s money and information from the hands of a few and into the hands of the many. We made this easy enough for anyone to do.”
Big Investors Swipe Right
Coinmine has raised a combined total of $2 million in funding to date. The company is backed by funds such as Coinbase Ventures, Social Leverage, Wonder VC and Arrington Capital, as well as angel investors including Tinder’s Norgard, Balaji Srinivasan, Anthony Pompliano, Ryan Hoover, Josh Jones, Penelope Linge and Tom McInerney.
“Throughout my entire career, I’ve worked to make complicated ideas simple, fun and useful,” said Norgard. “At Tinder, we removed the pain associated with setting up a dating profile so people could get to the action. When Farb initially came to me with the basis for Coinmine, I knew it was a radically novel solution to a messy problem — it was as they say, a perfect match. The limiting factor to scale in crypto continues to be complexity for the end user. Farb and the entire Coinmine team are one of the first companies attacking this problem head-on through a blend of hardware and software.”
Is mining at home really a viable possibility in the current market? Share your thoughts in the comments section below.
Coinbase Ventures Backs Home Crypto Mining Startup Coinmine
By Hyan Furtado
Bitcoin could be in for a recovery rally, having defended a key support level over the weekend.
The leading cryptocurrency has been looking bearish over the last week. It suffered an ascending channel breakdown on Nov. 7, suggesting a temporary top had been created at $6,540, while the moving averages rolled over in favor of the bears a day later.
As a result, BTC looked likely to drop below the support of the trendline connecting the Oct. 11 and Oct. 31 lows, and move toward $6,200 over the weekend.
Instead, though, it carved out a higher low (bullish pattern) at $6,270 yesterday. More importantly, the bears failed to secure a sustained break below that rising trendline.
At press time, BTC is changing hands at $6,360 on Coinbase, while the ascending trendline support is located at $6,300.
While the rebound from the ascending trendline is encouraging, a bullish reversal would only be confirmed if prices move above $6,540 to set a higher high.
1-hour chart
As can be seen above, BTC charted a second higher low along the rising trendline yesterday, saving the day for the bulls.
BTC is also currently creating the right shoulder of an inverse head-and-shoulders bullish reversal pattern. A break above the neckline resistance of $6,390, if confirmed, would pave way for a move to $6,510 (target as per the measured height method).
The major exponential moving averages (EMAs) – 50, 100 and 200 – have shed bearish bias (are flatlined) too. So, a bull breakout could happen in the next few hours as the prices have bounced nicely off the trendline support.
4-hour chart
Over on the 4-hour chart, the bullish divergence of the MACD (moving average convergence divergence) histogram is indicating that the sell-off from the last week's high of $6,540 has likely run its course and a recovery could soon unfold.
A bullish divergence is confirmed when an asset records a lower price low and the MACD records a higher low.
View
- The immediate bearish outlook has been neutralized.
- Recent highs above $6,500 could be put to the test if prices pass the inverse head-and-shoulders neckline hurdle of $6,390
- Acceptance below the trendline support on the hourly chart would signal a resumption of the sell-off from $6,540 and could yield a test of major psychological support at $6,000.
Bitcoin Teases Bull Move After Defense of Key Price Support
By Hyan Furtado
Market capitalization gets a lot flack for being a poor metric to measure the value of a cryptocurrency – and perhaps rightly so – but that shouldn't stop traders from using it as a tool to generate a market bias.
To summarize: the market capitalization of a cryptocurrency is a function of market price multiplied by the circulating supply, so its fluctuating value ends up visually mimicking that of price action when plotted on a price chart. And if it mimics price action, then technical analysis – the study of market behavior via price movement – can be applied to it just as if the price chart for bitcoin (BTC) was being analyzed.
It's no secret that cryptocurrencies are highly speculative assets that all bank on the widespread adoption of blockchain and distributed ledger technology (DLT). Since the entire market is so reliant on the success of this factor, it's rare for the trends of individual cryptocurrencies to deviate too far from one another for too long.
In other words, they are highly correlated, so if one cryptocurrency goes up or down in price, the others are soon likely to follow.
For the swing trader or long-term investor who does not care about intraday price fluctuations, charting the total market capitalization of all cryptocurrencies or just alternative cryptocurrencies (altcoins) can be an insightful way to analyze the long-term trend or bias of the broader market.
As it turns out, the total capitalization of the altcoin market is at an interesting technical juncture that could soon lead to another boom or bust for the market, which is further analyzed below through the use of technical analysis.
Weekly Chart
If we perform a simple technical analysis of the total capitalization of the altcoin market and connect the two major peaks in 2018, a long-term diagonal downtrend line is created.
In technical analysis, breaking a trendline to the upside is a bullish indication and hints the overarching trend is beginning change. The longer-term the trendline, though, the harder it is to break.
As can be seen in the above weekly chart, the capitalization came very close to touching the trendline but has since pulled back, as indicated by the visible upper wick.
Looking at weekly candlesticks from January and May, another rejection from the trendline could lead to a significant sell-off, whereas a weekly close above the trendline would suggest the long-term trend of the altcoin market is beginning to shift from bearish to bullish.
Daily Chart
While the weekly chart displays a major resistance hurdle that needs to break for a longer-term market trend reversal to take place, the daily chart reveals a nearer-term perspective on the outlook of the market, which has its own obstacles.
The pattern highlighted in the above chart is known as an inverse head and shoulders pattern which is a common 'bottom' or reversal pattern.
The pattern is comprised of three successive troughs, with the first and the third being similar in width and depth yet more shallow than the middle trough, known as the head.
In order for the reversal to take effect, the market capitalization would need to find acceptance above the neckline that was created by connecting the peaks on either side of the head with a trendline.
If successful, the depth of the head can be added to the breakout point to set a potential target. The depth of the head here is $34 billion, so if we add that to an anticipated breakout point, the market would have the potential for a 31 percent increase towards $141 billion in the not too distance future.
The Fibonacci retracement levels could be used as intermediate resistance levels, the nearest of which is the 0.382 retracement near $114 billion.
View
- The chart for market capitalization mimics that of price action and can be used to provide a broad perspective on the entire market.
- Finding acceptance above the inverse head and shoulder neckline would create a mid-term target for $141 billion, whereas breaking the weekly downtrend would suggest a longer-term bearish to a bullish trend change.
- Another rejection from the weekly downtrend would increase the chance of a broader market sell-off.
Why Traders Should Chart the Entire Crypto Market Cap
By Hyan Furtado
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