Bitcoin ASIC Maker Canaan Earns Despite Crypto Bull Run
Despite the ongoing crypto bull market, demand for Bitcoin application-specific integrated circuit (ASIC) miners and servers appears to be lukewarm.
On February 27, Bitcoin ASIC manufacturer Canaan reported Q4 2023 earnings. In the report, the company disclosed revenue of $49 million, a 16 percent decrease compared to the same period last year. Meanwhile, the company's net loss rose to $139 million and $91.6 million in Q4 2022. Despite the increase in the amount of computing power sold and the price recovery of Bitcoin (BTC), Canaan said that ASICs were sold at a low price compared to the market. year.
In addition, the company predicts more difficult market conditions in the future. “For the first quarter of 2024 and the second quarter of 2024, the company expects total revenue to be approximately $33 million and $70 million, respectively, given the challenging market conditions in the industry,” Cannon said. During the quarter, the company recognized a $55 million non-cash item due to price pressures.
Bitcoin has seen stellar gains recently, gaining 144.4% over the past year. Parallel to the price increase, the BTC mining difficulty doubled during the same period to 81.73 trillion. With consistently high electricity prices and the next Bitcoin halving in April, where mining rewards will drop by 50%, the Bitcoin mining industry may face a new headwind even as the coin's price returns to its previous highs. Canaan wrote:
“Recognizing the continued challenges for miners in the ongoing bearish market, we take inspiration from the recent approval and listing of spot Bitcoin ETFs. Long-term.”
On February 16, Cointelegraph reported that 20% of Bitcoin miners' hash rate was offline due to the post-halving loss of profitability. “Given how sensitive different ASIC models are to Bitcoin price and transaction fees as a percentage of rewards, we estimate that 15 – 20% of the network hash volume coming from ASIC models may be offline,” Galaxy analysts said. Research.
Related: Riot Platforms, other miners still see chip shortages, ESG regs as risks
