The stock of Canaan has skyrocketed 231 percent so far in 2021 as cryptocurrencies witness mainstream attention from institutions and retail traders alike
Shares of bitcoin mining equipment manufacturer Canaan Creative rallied over 50 percent on February 16 after the premier cryptocurrency breached the $50,000 mark for the first time.
At close, the scrip was up 50.61 percent to $19.64, just shy of its intraday high of $19.65.
The stock has skyrocketed 231 percent so far in 2021 as cryptocurrencies witness mainstream attention from institutions and retail traders alike. The sharp rise can also be attributed to a shortage of mining equipment, as noted by a Coindesk report earlier this year.
The demand for mining machines has risen manifolds thanks to the recent run up in bitcoin prices. Consequently, the Beijing-based company expects to benefit given that the excess demand which the current player can’t meet. The shortage will likely lead to higher premiums for Canaan’s in-demand products.
On February 16, bitcoin hit a new lifetime high of $50,584.85. It has risen around 69 percent so far this year, with most of the gains coming after electric carmaker Tesla said it had bought $1.5 billion in bitcoin. It also said it would accept the currency as payment.
Chief economic adviser at Allianz, Mohamed A El-Erian, expects more companies to take Tesla’s lead and invest in digital assets to mitigate the risk that exists in the financial markets.
But the stance of the official sector will be a key monitorable as they may finally draw a line on bitcoin.
“The risk (for bitcoin) comes from the official sector. The private sector is embracing bitcoin, both as a form of payment and as a way to invest,” El-Erian said.
At the time of writing this copy, bitcoin was trading up 0.09 percent at $49,677.55 on Coindesk. It touched a 24-hour high of $50,584.85 and a 24-hour low of $47,866.36.