Why Shares of Bitcoin Mining Company Canaan Are Plunging Today
For investors in most cryptocurrencies, it's been a rough year. However, for investors in crypto mining-related companies such as Canaan (NASDAQ: CAN), it's been a bloodbath. Today's 6% decline in Canaan has brought this company's decline from its 52-week high to more than 70%.
Canaan isn't a traditional Bitcoin (CRYPTO: BTC) mining company, in that this China-based company focuses on selling the integrated circuit mining equipment used by other major players. Thus, it's a proxy for overall investment in the crypto mining sector, and a stock that's often looked to as a gauge for potential growth in this space.
Reports circulating today that crypto miners are increasingly tapping equity and selling rigs to shore up cash on their balance sheets appear to be weakening Canaan's outlook. Notably, many Bitcoin miners are seeing profitability slump, as the price of Bitcoin remains relatively low (around $19,300) and Bitcoin mining difficulty surges.
Source Fool.com
