9. August 2020

Bitcoin mining manufacturer, Canaan, collapses at Nasdaq

The shares of Canaan Inc, one of the few publicly traded manufacturers of Bitcoin mining hardware, suffered significant losses. According to its first quarterly report, the Chinese firm’s shares on Nasdaq have fallen below 2 points.

Although the company has suffered heavy losses since last year, in the last month, these have been accentuated. Some data companies show that the stock plunge, after Monday’s close, stands at 1.89. This represents a significant drop of 0.22 points from Friday’s close.

This is another setback for the mining company Bitcoin, which is trying to recover from its losses. Halving the productivity of its machines, on the one hand, and the trade delays brought about by the Covid-19 pandemic on the other, have been stumbling blocks for the firm.

 

 The Halving was tough on the hardware manufacturer for mining Bitcoin

The data shown in the first quarterly report, compared to the same period last year, show some level of recovery. Despite this, since Bitcoin’s Halving, the company’s shares on Nasdaq have fallen progressively.

 

Bitcoin’s Halving cut the rewards in this currency in half. They paid the miners 12.5 BTC per block mined, and now give them 6.25 BTC for the same work. In addition, the price of the main krypton currency has remained in the same range before and after the cut.

 

These facts have caused consternation at the Bitcoin mining hardware manufacturer. Such is the magnitude that, since the date of the Halving, its shares on the stock market have plummeted and have barely shown two positive closings since May 14.

 

To illustrate an example, from May 14 to 15, the company’s shares closed at -1.57. This is a significantly large figure for a single stock market day. Before the cut, these shares had been slowly recovering since the beginning of April.

The losses in the world of Bitcoin mining are real

 

Contrast with the first quarterly report

The recent losses in terms of shares in Nasdaq of the mining manufacturer Bitcoin, seem to affect the progress of the first quarter of the year. In the aforementioned report published by the firm, the numbers are notably better than those presented in the same period of time last year.

 

In the document, it is specified that there was an increase in equipment sales, measured in terasahs. This would have been 18.4% compared to the first quarter of last year. While net revenues were 44.6% in the same time period.

 

Nangeng Zhang, president and CEO of Canaan, said that the key to this rebound would have been the improvements in the offerings. The Bitcoin Billionaire mines marketed by the manufacturer, he explains, show improvements in terms of reduced maintenance costs thanks to the introduction of „a series of SaaS solutions.

 

„We further improved the quality of our product offerings and strengthened our value propositions. This allowed us to minimize the impact of price fluctuations of Bitcoin and derivatives after Halving. In the future, we expect our commitment to drive growth and help us create sustainable value for our shareholders,“ said Zhang.