The stock price of NASDAQ-listed Canaan Creative, a manufacturer of crypto mining equipment, surged by 82.73 percent on Wednesday.
Trading of the share opened at $4.55, and by the time of market closing, the price of each stock soared to $8.04, after touching a daily high of $8.34.
Canaan listed its stocks on the United States exchange late last year following a $90 million IPO.
The Hangzhou-based company then sold 10 million American depositary shares for $9 apiece each at the bottom of their market range, which was kept between $9 to $11.
Despite the hype over blockchain stocks, Canaan’s shares dropped nearly 40 percent within weeks of its listing.
On February 12, the market trend pivoted, and the stock of the company saw a massive surge.
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More than 11 million shares of the company changed hands on the day, compared to the daily average trading volume of 250,000.
Increasing demand in the BTC mining
Founded in 2013, Canaan sells computer equipment under the “Avalon” brand. According to its SEC filing, it controls 15 percent of the global market for bitcoin mining chips and computer equipment, which makes it the second-largest company in the sector following Bitmain.
The sudden rise in the Canaan’s stock price followed the rally of Bitcoin’s price in the spot market, which is holding strong beyond $10,200.
Moreover, the approaching halving of Bitcoin mining rewards is also affecting the demand for mining equipment as many miners are upgrading their mining facilities with recent miner models capable of generating more hash rates.
The company is also developing a 5nm mining chip, which will further increase the efficiency of the mining devices. Equipment laced with these new chips is anticipated to hit the market before the first quarter of this year.
Meanwhile, the Chinese government is cracking down on crypto mining facilities amid the recent outbreak of coronavirus in the country.