With Bitcoin Suddenly Surging, Canaan Stock Is Also Going Up Today
Shares of Canaan (NASDAQ: CAN) were trending higher on Monday, after the price of bitcoin surged over the weekend. The company manufactures bitcoin mining hardware, so it stands to benefit from the rising price. As of 2:45 p.m. EDT today, the stock was only up 3%, but it had been 14% higher earlier in the session.
In simple terms, when a transaction is made on the bitcoin network, a computer must validate it. Upon successful validation, new bitcoin is created to reward the computer owner who did it first. This process is called mining, and it creates a constant new supply of bitcoin. Computers "compete" to receive this reward, resulting in the need for ever-more-powerful computing hardware -- the kind Canaan makes.
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Source Fool.com
