Shares of Bitcoin Mining equipment maker Canaan Creative rose 41% on Tuesday when Bitcoin broke the $ 50,000 mark for the first time.
Canaan’s shares have seen tremendous gains over the past six months, up over 770% on a historic run around cryptocurrencies and a Lack of crypto mining machines.
The Beijing-based company expects to benefit from higher bitcoin prices in 2021 as the surge in cryptocurrency continues to spark increased demand for mining equipment that suppliers cannot meet. The shortage is likely to result in higher premiums for Canaan’s in-demand products.
Kanaan Creative Bitcoin Miner.
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Bitcoin broke the $ 50,000 For the first time on Tuesday after a series of reports stated that institutional investors are targeting digital assets.
The news continues a bull run on Bitcoin that began after that Tesla announced a $ 1.5 billion investment in digital currency on February 8th. After Tesla’s move, there were reports that JP Morgan and Morgan Stanley are now eyeing BitcoinThis causes more investors to jump into the currency fearful of missing out.
Daniel Pinto, JPMorgan’s Co-President and Chief Operating Officer said CNBC on Friday: “If over time an asset class develops that is used by various asset managers and investors, we need to be involved.”
“The demand is not there yet, but I’m sure it will eventually,” added Pinto.
This positive news for Canaan comes just a week after the company announced it would be more clearly forecasting its sales outlook due to a shift in its customer base.
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Nangeng Zhang, Chairman and CEO of Canaan said in a statement To investors: “At the end of 2020, we shifted our customer base to mainly public companies and Bitcoin-focused mutual funds, which tend to place larger orders with longer-term commitments. As a result, we can now forecast our sales much more accurately.”
The company also said it had received over 100,000 orders for Bitcoin mining machines in 2021.
“Our increased sales visibility enables us not only to plan our production and logistics at an early stage, but also to optimize our cost structure and improve our customer satisfaction rate. Above all, this should help us achieve profitable growth over the long term,” said Zhang.
Canaan rose 37.85% to $ 17.98 at 1:07 p.m. ET Tuesday.