Canaan, a leading cryptocurrency mining rig manufacturer, reported an 82% year-on-year decline in revenue for the fourth quarter of 2022, citing “lackluster market demand” for mining machines as Bitcoin price fell. On Wednesday, the company’s Nasdaq stock closed 3.83% lower at US$2.51.
In Q4 2022, Canaan’s revenue dropped by 60% from the previous quarter, amounting to 391.9 million yuan (US$56.8 million), a slump of 82.1% from the same period in 2021.
The company reported overall revenue of 4.38 billion yuan for the year, down from 4.99 billion yuan in 2021, mostly due to a decline in the amount of processing power sold.
Nangeng Zhang, Chairman and CEO of Canaan, acknowledged the tough times that the company went through in the fourth quarter.
Zhang said, “As expected, the falling Bitcoin price during the quarter led to a lackluster market demand for mining machines.” He added that Canaan had been diligently improving and developing its mining business to mitigate demand risks during the market downturn.
Canaan Plan To Capitalize On The Bitcoin Ecosystem
Canaan is developing its own Bitcoin mining business as a secondary engine to capitalize on the Bitcoin ecosystem, in addition to mining machine sales, in the face of the Bitcoin market slump.
According to the report, as of the end of February, the company had installed computing power totaling 3.8 exahashes per second (EH/s) for its mining operations in Central Asia and North America.
Canaan is increasing computing power with the goal of reaching 5 EH/s to 5.5 EH/s by the end of this year’s first quarter. The company expects this move to help it generate more revenue and diversify its business, reducing its dependence on mining machine sales.
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In 2022, Canaan reported a net income of 658.2 million yuan, compared to a net gain of 2 billion yuan in 2021. The company is optimistic about its Bitcoin mining prospects and hopes to turn its fortunes around in the coming quarters.