Tag: Canaan

Bitcoin Miner Canaan Reports $73.9M Revenue in Q2

by Blockchain News

Canaan Inc. (NASDAQ: CAN), a leading provider of high-performance computing solutions, unveiled its unaudited financial metrics for the second quarter of 2023 on August 29. In the face of market headwinds, the company saw a notable 44.2% sequential growth in total computing power sold, hitting 6.1 million Thash/s. Yet, the organization is contending with regulatory shifts in Kazakhstan and an ongoing legal battle in the United States, factors that may affect its future operations.

Financial Overview

For the second quarter of 2023, Canaan reported revenues of $73.9 million, a rise from the first quarter’s $55.2 million but a decline from $245.9 million in the corresponding quarter of 2022. Mining-related revenue experienced a substantial surge, climbing to $15.9 million, up 43.3% from $11.1 million in the previous quarter. Despite these revenue increases, the company logged a net loss of $110.7 million, largely due to non-cash charges such as inventory write-downs, which amounted to $54.7 million.

Regulatory Challenges

In July 2023, Kazakhstan introduced new licensing rules for digital mining activities. Canaan has temporarily shut down approximately 2.0 Exahash/s of its mining computing power in the country and is in the process of obtaining a specialized license. The company expects this suspension to continue into Q3 2023, affecting its bitcoin generation capabilities.

U.S. Legal Dispute

Canaan U.S. Inc., a subsidiary, is embroiled in a legal dispute with a U.S.-based partner over a breach of their Joint Mining Agreement. The disagreement involves issues ranging from installation failures to unreturned deposits and profits. With mediation proving unsuccessful, Canaan U.S. plans to proceed to arbitration.

Business Outlook

For Q3 2023, Canaan expects total revenues to be around $30 million, citing challenging market conditions. As of June 30, 2023, the company held cryptocurrency assets primarily comprising 1,125 bitcoins with a total carrying value of $28.8 million.

Analyst Take

Canaan’s Q2 results show resilience in a volatile market, but the firm is not without its challenges. Regulatory changes and legal disputes could hamper its growth trajectory. Investors should keep an eye on how the company navigates these hurdles, especially as it holds a conference call to discuss these financial results today at 8:00 A.M. U.S. Eastern Time.

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Canaan’s Q4 2022 Revenue Declines by 82.1% YoY to $56.8M

by Blockchain News

Chinese Bitcoin miner and manufacturer of application-specific integrated circuit (ASIC) mining machines, Canaan, has reported an 82.1% YoY revenue decline to $56.8 million in Q4 2022, according to a new filing with the U.S. Securities and Exchange Commission on Mar. 7. This represents a significant drop in revenue for the company, which sold 1.9 million terahash per second worth of computing power for Bitcoin mining during the quarter. However, this figure does not account for lower ASIC prices and represents a 75.8% decline from Q4 2021.

Despite the decline in revenue, Canaan’s mining revenue improved by 368.2% YoY to $10.46 million. Nangeng Zhang, Chairman and CEO of Canaan, said that the company had been “diligently improving and developing our mining business” to mitigate demand risks during the market downturn. This effort yielded more progress in early 2023, with 3.8 EH/s hash rate installed for mining as of the end of February. Accordingly, the company has made decisive investments in bolstering its production capacity and expanding its mining operations to more varied geographic regions that offer advantageous conditions.

However, the company’s net income swung to a $63.6 million loss in Q4 2022 compared to a profit of $182.0 million in Q4 2021. According to Jin Cheng, Chief Financial Officer of Canaan, the loss was due to inventory write-downs and research expenses related to its new fleet of ASICs. He said, “Considering very soft market demand and low selling price, we incurred an additional inventory write-down of RMB205.3 million, which also dampened our gross margin. In conjunction with one-time higher research and development expenses relating to the tape-out for our A13 series, our bottom line suffered losses during the quarter.”

 For the full year, Canaan’s revenue decreased by 13.8% to $634.9 million, mainly due to better industry conditions in Q1 and Q2 2022. Despite the decline in revenue, the company has a strong balance sheet, with $706 million in total assets compared to $67 million in total liabilities.

Looking ahead, Canaan expects to face continued market challenges and volatility, but remains committed to developing its mining business and investing in new technology to drive long-term growth. The company’s recent investments in production capacity and geographic expansion suggest that it is well-positioned to capitalize on any future recovery in the Bitcoin market.

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Chinese Mining Firm Canaan Inc Doubles Revenue Despite Bitcoin Ban

by Blockchain News

Canaan Inc, a Chinese cryptocurrency mining giant and computing resource provider, has reported a better than expected revenue, despite the ban on crypto mining and transaction activities in China.

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As announced by the company, its total revenues came in at RMB1,652.7 million ($246.7 million), a figure that represented an increase of 21.9% from the RMB1,356.1 million it reported in the first quarter of 2022. This impressive revenue also comes in as a 52.8% increase from the RMB1,081.8 million recorded in the same period of 2021.

 

What was most striking about Canaan Inc’s revenue is the fact that its computing power plunged lower in the second quarter. Per the figures published, the total computing power sold was 5.5 million Thash/s, representing an increase of 27.5% from 4.3 million Thash/s in the first quarter of 2022 and a decrease of 7.7% from 5.9 million Thash/s in the same period of 2021.

 

Though it is trading publicly on the Nasdaq Global Select Market, Canaan Inc is a Chinese company with its headquarters in Beijing. The firm’s Q2 performance has not really shown any form of dearth in operations and revenue despite the hostility of the Chinese government towards crypto activities as well as the overall impact of the crypto winter.

 

“The solid topline performance primarily resulted from the sequentially increased computing power sold and relatively high average selling price we secured with contract sales from previous quarters where the Bitcoin price was at a higher level. As the Bitcoin price further decreased in the second quarter, we responsively lowered our product price for spot sales to shoulder the pressure with our clients,” said James Jin Cheng, Chief Financial Officer of Canaan.

 

While Canaan’s financials show it is cash flow positive, the situation was notably different for other key stakeholders in the crypto mining ecosystem like Core Scientific, which sold more of its mined BTC to offset some of its debts and liabilities.

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Intel To Present Low Voltage, Energy Efficient Bitcoin Mining Chip At Conference

by NEWSBTC

This could be huge. Intel plans to enter the Bitcoin mining space with a cleverly marketed “ultra-low-voltage energy-efficient” ASIC chip. Considering that the chip shortage severely delayed the next generation of ASIC miners, this is tremendous. And, more importantly, it opens up the door for Bitcoin miners manufacturing in the USA. And in the rest of the Western world, even. 

Related Reading | Why Did China Ban Bitcoin Mining? Here Are The Seven Leading Theories

In December, Raja Koduri hinted at Intel’s intention to get into the Bitcoin mining space. Even though he’s the chief architect and senior vice president of Intel’s architecture, graphics and software division, no one expected Intel to deliver so soon. Details are scarce. There’s nothing on Intel’s official site. A quick search reveals that “Access to additional search results for “bonanza” is restricted.”

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However, we have the 411 on the project that goes by the code name “Bonanza Mine.”

What Do We Know About Intel ’s “Bonanza Mine”?

The product will be an “ultra-low-voltage energy-efficient Bitcoin mining ASIC.” According to Tom’s Hardware, the page that broke the news, Intel will reveal their new chip at:

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“The ISSCC conference is a yearly gathering of the best and brightest minds in the chip industry. This year, Intel has a presentation scheduled in the ‘Highlighted Chip Releases’ category to outline a new “Bonanza Mine” processor, a new chip described as an “ultra-low-voltage energy-efficient Bitcoin mining ASIC.”

Apparently, Intel has been developing the product since at least 2018, when they registered “a patent for a specialized processing system that uses an optimized SHA-256 datapath.”According to Tom’s Hardware, “Intel has a wealth of experience in hardware-assisted SHA-256 algorithms due to the use of these instructions in its CPU products.” 

A more recent indication of the company’s intentions came when the already mentioned Intel executive Raja Koduri “appeared on popular streamer Dr. Lupo’s show.” He told him point-blank”

“Being able to do much more efficient blockchain validation at a much lower cost, much lower power, is a pretty solvable problem. And you know, we are working on that, and at some point in time, hopefully not too far into the future, we will kinda share some interesting hardware for that.”

BTCUSD price chart for 01/18/2021 - TradingView

BTC price chart for 01/18/2022 on Bitstamp | Source: BTC/USD on TradingView.com

Why Is This Development Important?

Until now, ASIC Bitcoin miners manufacturing is controlled by Bitmain and Microbt, with Canaan, Strongu, and Ebang handling a minority of the market. All of those companies are Chinese. The chips are all made in Taiwan and South Corea. This poses a centralization problem for the Bitcoin network that seemed unsolvable until Intel’s soft announcement.

Now, the open-source Bitcoin miner that Jack Dorsey’s Block is working on makes a lot more sense. Theoretically, the silicon chip is the only part of an ASIC machine that can’t be bought in a hardware store. With that problem solved, by no less than an industry leader with immense manufacturing power, the sky’s the limit. If this whole thing materializes, expect a huge leap forward in the further decentralization of Bitcoin mining. 

Also, Intel’s announcement certainly legitimizes Bitcoin mining as a business to watch for the next 100 years. As podcaster Anthony Pompliano said, “Bitcoin is a computer network. Every technology company will eventually plug themselves into it.” With this announcement, Bitcoin not only gets Intel’s seal of approval. The giant company has now skin in the game. 

Related Reading | Intel, Microsoft Took 10+ Years to See Gains, Crypto Investors in Good Position

To close this off, let’s quote Tom’s Hardware one more time:

“For now, it isn’t clear if Intel will release the Bonanza Mine chip as a product for the public or if it remains confined to a research project. However, given that the chip is in the “highlighted Chip Releases: Digital/ML” track and Koduri’s comments, it’s logical to expect that these chips will be offered to customers in the near future.”

So, everything we said is not a done deal just yet. It smells good, though.

Featured Image by Badar ul islam Majid on Unsplash  | Charts by TradingView

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Crypto Biz: The Rise of the Bitcoin Treasury, Dec. 30-Jan. 6

by Cointelegraph

The price of Bitcoin (BTC) cratered below $43,000 on Thursday in a selloff that was stoked by the Federal Reserve’s renewed pledge to start unwinding its pandemic stimulus support. For the so-called diamond hand investors among us, the decline presents an attractive entry point to continue accumulating BTC at discount rates. 

2021 was the year that institutions and corporations became major movers and shakers in the Bitcoin market. By the end of the year, corporations and investment funds held roughly 1.48 million BTC, which represents 7% of the current circulating supply. Do you think these large, strategic investors are going to get shaken out by FUD?

Below is the concise version of the latest “Crypto Biz” newsletter, which is delivered to your inbox every Thursday. For a comprehensive breakdown of business developments over the last week, register for the full newsletter below.

Bitcoin corporate treasuries surge

The number of publicly-listed companies holding Bitcoin grew in 2021, as more corporate executives began recognizing the digital asset’s value proposition. According to on-chain analyst Willy Woo, corporate treasuries have gained market share from leading spot exchange-traded funds, sending a strong signal that corporations are having a bigger impact on the Bitcoin market.

Related: Bitcoin could outperform stocks in 2022 amid Fed tightening — Bloomberg analyst

WonderFi plans to purchase Bitbuy parent company for $162M

WonderFi Technologies, a decentralized finance platform backed by business mogul Kevin O’Leary, announced this week that it will acquire Bitbuy owner First Ledger Corp in a deal valued at $162 million. Founded in 2016, Bitbuy is a licensed crypto exchange operator in Canada with over 375,000 users. To fund the purchase, WonderFi will issue 70 million new shares, pay $15.7 million upfront and $23 million in deferred cash in 12 months.

Canaan expands footprint in Kazakhstan

Soaring fuel prices stoked unprecedented political unrest in Kazakhstan this week, forcing the country’s presiding cabinet to resign unexpectedly. Just one day prior, Chinese Bitcoin mining manufacturer Canaan Inc announced it had broadened its business ties with the central Asian country. As of Dec. 31, 2021, Canaan had deployed 10,300 AvalonMiner units in Kazakhstan. The political upheaval in Kazakhstan had a negative impact on the Bitcoin network, which saw its hash rate plummet 13.4% in a matter of hours.

Related: Cointelegraph Consulting: Crypto events of 2021 in retrospect

NFT-focused holding company closes $50M Series A

Digital asset curator Metaversal concluded a $50 million investment round that was co-led by CoinFund and Foxhaven, with additional participation from Dapper Labs, Digital Currency Group, Rarible and Theta Blockchain Ventures, among others. Metaversal will use the proceeds to expand its NFT-focused business, which includes acquiring more digital collectibles and supporting up-and-coming projects in the space.