The shares of the Chinese crypto mining giant Canaan Creative fell below $2 on Monday for the first time. According to Yahoo Finance, the share price stood at $1.98 at the end of yesterday's trading session after posting a 3.88% drop.
According to Aries Wang, co-founder of the crypto exchange Bibox, this drop is related to the decline in demand for mining equipment during the months before the Bitcoin halving, which took place in May. Wang said:
"Some of the earliest Chinese miners started to raise funding from institutional investors and buy new models and phase out old machines so that they would be prepared for the halving. Many had already completed the update on infrastructure such as mining sites and miners before the end of February."
Canaan tried to boost the sales of its devices this year offering lower prices. However, the company suffered a net loss of $5.6M. In addition, the coronavirus pandemic also affected sales during the Q1 as the company was unable to deliver its products.
Canaan held an IPO in November last year at an initial price of $9 per share. However, the share price plummeted during the first month of trading.
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