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Rising electrical energy prices and a decline in digital asset costs coupled with excessive mining issue within the fourth quarter slashed mining revenue margins and made it tough for miners to remain afloat.
Chinese language crypto mining rig maker – Canaan – reported a mining income of $10.5 million within the fourth quarter, representing a rise of 16.3% from the earlier quarter. It was additionally up by a staggering 368.2% in comparison with the identical interval in 2021.
However the larger image tells a distinct story.
Canaan’s Monetary Outcomes
In response to the official press release, Canaan was not spared within the crypto winter both, as its year-on-year income took a extreme hit. The corporate reported a staggering lack of 82% to $56.8 million. Throughout the identical interval, it bought a complete computing energy of 15.1 million Thash/s, representing a YOY lower of 32.4% from 22.3 million Thash/s in 2021.
Within the fourth quarter, the whole computing energy bought was 1.9 million Thash/s, down by 45.8% from 3.5 million Thash/s within the earlier. The determine was additionally down by 75.8% from 7.7 million Thash/s in the identical interval of 2021. The gross loss within the fourth quarter of 2022 stood at $33.5 million. Throughout the identical interval, working prices went up by 43.1% from the third quarter.
2022 was painful for Bitcoin miners around the globe. Nangeng Zhang, Canaan’s Chairman and Chief Govt Officer, additionally attributed the sinking bitcoin worth that led to lackluster market demand for mining machines ensuing within the underwhelming efficiency of the corporate.
“Regardless of the difficult market surroundings, 2022 was a notable yr of milestones for our firm. We expanded globally and established abroad provide chains and headquarters in Singapore. Our groups gained expertise in working our mining enterprise in varied abroad places.”
The exec is, nonetheless, optimistic in regards to the monetary outcomes this yr.
Change in Tide?
Losses apart, Zhang revealed that the corporate’s efforts yielded extra progress in early 2023, with a 3.8 EH/s hash charge put in for mining as of the tip of February. The exec stated Canaan has made “decisive” investments specializing in its manufacturing capability and increasing its mining operations to extra numerous geographic areas that supply favorable situations.
He went on so as to add that the expansion of those high-quality property is predicted to convey the miner “great bitcoin rewards and considerably recognize in worth when the bitcoin worth will increase.”
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