Canaan Creative Inc. (NASDAQ: CAN) stock declined by 8.32% in the last trading close whereas the CAN stock price rises by 11.16% in the pre-market trading session. Any recent news is not provided as the reason for the rise and fall of CAN stock. Canaan is a computer hardware manufacturing company based in China. CAN mainly deal with Blockchain servers and ASIC microprocessor solutions to be used in the mining of Bitcoin. In the beginning, Canaan used to develop FPGA products through the SHA-256 algorithm.
What is happening?
Recently it has been seen that Bitcoin the world’s largest cryptocurrency is getting bigger. On March 11, a 2% increase in the price of bitcoin was recorded which made it to $58,000 per bitcoin. Eventually causing the market capitalization of Bitcoin to reach $1.07 trillion. On the same day, the latest economic stimulus package was signed by President Joe Biden that caused a major rally on Wall Street. The rise in Bitcoin price and the stimulus together caused a major increase in cryptocurrency stocks. This gives an overview of what is recently happening to cause the CAN stock to rise.
On the other hand, it is being mentioned that Canaan already has orders for around 100,000 Bitcoin machines which means that the rise in Bitcoin price is of more interest for other Bitcoin mining companies than Canaan. Hence these orders have already pushed the company’s capacity to the limit for the rest of 2021 and possibly more than that. It is possible that the rising price of Bitcoin might increase mining demand but Canaan will not be able to meet it unless it also expands its manufacturing capacity.
We cannot deny to the existing problem of operating at capacity for Canaan therefore it would be irrational to forecast Canaan’s revenue and progress in this year 2021. Nonetheless, Canaan has shown positive developments but the investors still need to be sure before making any durable investment also because the price of Canaan’s Bitcoin mining machines is also uncertain and can be affected by various reasons.