Mining Gear Manufacturers to Test Crypto Appetite Through IPOs

IPO Mining

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Sead Fadilpašić

Journalist

Sead Fadilpašić

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Sead specializes in writing factual and informative articles to help the public navigate the ever-changing world of crypto. He has extensive experience in the blockchain industry, where he has served...

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Last updated:

June 26, 2023 06:53 EDT

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Two Chinese mining gear manufacturers are looking to raise up to USD 1 billion to make ends meet, due Beijing tightening its grip on trade in the virtual currency and Bitcoin prices plummeting compared to the end of last year.

Canaan Creative has applied to the Hong Kong stock exchange for an initial public offering (IPO), the Thomson Reuters publication, IFR, reported. Meanwhile, Zhejiang Ebang Communication has started working with advisers on a Hong Kong float. The amount they seek would dwarf other known listings for cryptocurrency firms, according to IFR.

This move is testing the appetite investors have for cryptocurrencies and whether making mining equipment is still a lucrative business, as the companies offer specialized rigs that are more efficient than the more mainstream chips made by companies such as Intel.

However, IFR quotes unnamed sources that although Canaan was valued at USD 500 million in mid-2017, the valuation for its IPO has yet to be set due to a lack of companies to compare it to and fluctuating prices of cryptocurrencies.

In an interview with Reuters last month, Canaan’s co-chairman Jianping Kong said that according to their estimates, Canaan provides a quarter of the world’s Bitcoin blockchain computing power. He says that he expects China’s push to promote its domestic chip industry to help drive growth for the company.

It is speculated that the amount raised through these IPOs will be a good indicator in the general interest in the future of mining and thus cryptocurrency. Meanwhile, Fundstrat predicts a jump in Bitcoin price due to growing hash power.