Canaan Inc. (NASDAQ: CAN), a leading provider of cryptocurrency mining equipment, saw its stock plummet 11.15% in intraday trading on Tuesday. The sharp decline comes as the company announced a US$72 million registered direct offering of American Depositary Shares (ADS) and amid a broader cryptocurrency market downturn.

The company revealed plans to issue and sell up to 63.7 million American Depositary Shares in a registered direct offering. Canaan stated that it intends to use the net proceeds from this offering for the acquisition and development of data center sites and facilities in North America. While this move may support the company's long-term growth strategy, the potential dilution of existing shareholders appears to have negatively impacted the stock price.

Adding to the downward pressure, the cryptocurrency market experienced a significant slump, with Bitcoin falling below $105,000 and Ethereum dropping to $3,530. As a major player in the crypto mining hardware industry, Canaan's fortunes are closely tied to the overall health of the cryptocurrency market. The recent decline in cryptocurrency prices could potentially impact demand for Canaan's mining equipment, as lower crypto values may reduce the profitability of mining operations. This sector-wide trend has affected various crypto-related stocks, with several companies experiencing notable declines alongside Canaan.