Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Canaan Net Income Nosedives 88% As Bitcoin Mining Suffers On Heels Of FTX Crumble

Published 14/11/2022, 14:20
Updated 14/11/2022, 15:41
© Reuters Canaan Net Income Nosedives 88% As Bitcoin Mining Suffers On Heels Of FTX Crumble

© Reuters Canaan Net Income Nosedives 88% As Bitcoin Mining Suffers On Heels Of FTX Crumble

Benzinga - Canaan (NASDAQ: CAN), a manufacturer of Bitcoin (CRYPTO: BTC) mining equipment, reported lackluster third-quarter financial results on the heels of a difficult few months for the crypto industry.

According to the Beijing-based company:

  • Net income plummeted 88% to 61.1 million yuan ($8.6 million) from the same period a year earlier.
  • Revenue fell 26% to 978.2 million yuan
  • Total computing power sold fell 48.5% to 3.5 million terahashes per second (the rate of hashes per second determines how long it takes to complete a block).

Canaan isn't the only bitcoin mining firm having a tough time. Compute North, a provider of data centers, declared bankruptcy in September.

Liquidity problems have also affected Argo Blockchain (NASDAQ: ARBK) and Core Scientific (NASDAQ: CORZ).

Also read: Crypto.com CEO Says ETH Worth $300M Transferred 'Erroneously,' Binance's CZ Tweets 'Clear Sign Of Problems'

“The negative market dynamics have significantly hindered bitcoin miners' revenues and cash flows. As miners are forced to cut their demand for computing power, we had to adjust down our selling price in response,” Canaan CEO Nangeng Zhang said.

While efforts were being made in the research and development of supercomputing technology, Canaan faces "a very tough industry period as the Bitcoin price is sinking to lows the market has not seen in two years," Zhang explained.

"Our priority is to conserve our cash, minimize our expenses, and endure this market downturn," he added.

The scenario was likely worsened by the collapse of crypto company FTX, which was once valued at $32 billion but is now valued at next to nothing after declaring bankruptcy last week.

Market circumstances are anticipated to continue deteriorating due to "Bitcoin's downward trajectory, rising energy prices, and miners under increased cash pressure," according to James Jin Cheng, CFO of Canaan.

Shares of Canaan were last trading at $2.69, according to data from Benzinga.

Next: 'They Just Couldn't Have So Much Cash': Binance CEO On His FTX 'Hunches' And Importance Of Stablecoins In Bear Market

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Read the original article on Benzinga

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.