Bitcoin (BTC) Canaan, which manufactures mining machines and designs chips used for mining, said after a difficult second quarter, tougher market conditions will hurt its financial performance in the coming months.
Beijing-based Canaan reported on Thursday that its second-quarter revenue was 1,653 million yuan ($247 million), up 53% year-on-year, with earnings of 53 cents per American depository share.
Canaan: “Low Bitcoin Price May Affect Performance In The Next Quarter”
In the earnings statement, CEO Nangeng Zhang described this quarter as a “challenging period” as the price of Bitcoin fell below $20,000 in June and China closed some cities due to COVID-19. Zhang added that the low Bitcoin price “will create long-lasting negatives in their performance in the coming quarters.”
Bitcoin miners’ profit margins were the largest in the world at the beginning of June cryptocurrency It fell after a market crash that drove the unit below $20,000. Miners have also faced rising energy prices in recent months as a result of the war in Ukraine.
Computing power sold fell from 5.9 million TH/s to 5.5 million TH/s. Canaan responded by cutting prices on spot sales, which he said will result in a dramatic drop in gross margin in the second half of the year.
James Jin Cheng, the company’s chief financial officer, said in a press release:
“Looking to the coming quarters, we see a more challenging market environment due to the lower Bitcoin price level, the generally rising energy price, and various pandemic and geopolitical uncertainties globally, all of which could jeopardize the demand and price for our products.”
*Not investment advice.
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