Canaan adopts bitcoin mining in the pursuit of Crypto No Man’s Land – Bamboo Works

The coded currency mining maker was absent from the market mutation last year, and the production of its bitcoin currencies is enhanced just as the sector shows signs of stumbling

Main meals:

• Canaan strengthened Bitcoin’s production by about 10 % in March of February after the “half” event in Bitcoin last year, but the demand for its mining machines
• The consecutive mining efforts of the company come at a time when the encryption market enters a new stage of uncertainty created by the recent US protectionist policies

By Warren Yang

It was called the promised biblical land, however Canaan Inc. (Can.us) looks stuck away from heaven these days, even when the encryption market has flourished around last year. The wealth of the coded currency mining maker is usually associated with changes in the values ​​of digital assets, as strong markets usually enhance the demand for their products.

But the company failed to benefit a lot from the bull’s encryption race last year because the gathering was largely nourished by Bitcoin. This mechanic was built in the algorithm that creates new bitcoin currencies, and reduces the number of new bitcoins that are created by half, making it difficult for miners to achieve profits and thus reduce the demand for new mining machines. This reality was reflected in the large last year of Canaan, even with the high encryption prices.

To diversify what is beyond its dependence on machine sales, Canaan builds her mining operations to benefit directly from bitcoin gains, and she earns some additional money through these efforts. This latest work grows, as shown in the company The latest monthly report Posted last week. But self -reinforcement comes with the same headache that all miners are now facing trying to benefit from the last encryption madness.

After prosperity last year, as Bitcoin briefly touched a brand of $ 100,000, the coils are equal to the same time, as Donald Trump’s tariff threatens the global economy in stagnation. Bitcoin just came out of the worst performance in the first quarter in seven years, and the story was similar to other major cryptocurrencies like Ethereum.

On this background, Canaan faces a potential double sensation offered by a decrease in the demand for their mining machines, as well as a decrease in the values ​​of their bitcoin holdings. The company’s latest monthly report shows that it was upgraded 90 Bitcoins last month, an increase of about 10 % of the total and most of February since last December, in the first month in which I started providing monthly updates on Bitcoin production. Canaan held 1,408 Bitcoin at the end of March, at a value of about $ 120 million on the basis of current prices.

Bitcoin prices are certainly much higher than they were a year ago, even after they decreased by about a quarter of the record in January, after Trump’s elections last year fueled the hopes of more encryption policies. This means that Canaan can still reserve important evaluation gains on Bitcoin that were extracted last year before the currency reached its peak.

The Rules of the Financial Accounting Standards Council (FASB) published in December 2023 of encryption miners require changes in the value of their digital assets as gains or losses in their financial reports. Before that, they were not only able to reserve the disability fee when the values ​​of their encryption assets decreased, but they had no way to include gains.

Although the new FASB requirements for the treatment of encryption assets were not mandatory until this year, early adoption was allowed, which appears to have done it. Last year, the company recorded a profit of $ 42 million to reflect the increase in the value of the Bitcoin portfolio, while it had received twice of $ 4.7 million, according to what it said. The latest quarterly results It was released late last month.

Bitcoin fluctuation

This new accounting treatment for Bitcoin Kanaan helped to narrow its net loss last year. However, the company will have to evaluate the stomach if the prices continue to slip this year.

“Starting in February, the main changes in the global political and economic environment have caused great fluctuations in bitcoin prices,” said Zhang Nanging, CEO of Canaan at the company’s profit call last month. “This negatively affected market morale and future expectations, especially financing activities throughout the markets. Given these common factors, we maintain very cautious expectations for the first quarter of 2025.”.

Canaan still expects a great leap in her revenue for this year. The number is expected to reach $ 1.1 billion, and a quarter of the quadrant from $ 269 million for 2024.

The company has a lot in its interest, especially in the United States, MINING MACHINE has won the main thing of a new strategic agent in the United States in January. Last month, agreements were signed with two partners in the country to use their facilities in Pennsylvania and Texas for mining, which will give a boost to produce its bitcoin.

These deals will lead to the growth of revenue, and thus the company’s expectations to achieve strong gains in the line this year. The company is close to returning to the total profitability – something that has not achieved since 2022 – as it builds a scale. But its operating expenses are likely to continue to overcome any total profit that it will achieve for some time, and the evaluation losses will also work on Bitcoin Confles against it as she tries to return to clear profitability – something he has not done since 2022.

The company’s lack of profits comes during the past two years, as it tries to find new orders for its original mining machine and spends on building the latest mining work. In the first quarter, she raised nearly $ 100 million by issuing new, transferred favorite shares, and obtained a loan of $ 21 million supported by Bitcoin’s possessions. He also raised about $ 43 million through a market offer for US depositary shares.

Despite all these efforts-or perhaps because many hints to collect donations are in despair for criticism-Canaan shares decreased by 37 % last year to trade a price rate (P/S) by only 0.8. This is much lower than 6 to EBANG (eBon.us), the smallest maker of encryption mining machines. It is also much lower than the most used encryption mines for the public BitFufu (Fufu.us) and Mara (Mara.us), which traded at 1.5 and 6 ratios, respectively.

Perhaps the direct exposure to bitcoin prices, as a result of a strategic decision that fails to Canaan in 2022, makes investors tense. For the company, it may be a long game that can bear fruit well if Bitcoin and other encryption currencies gather again and generally go to the top in the long run. This is definitely a strong possibility as cryptocurrencies acquire a wider acceptance, although they are far from the certainty of the changing rapid scene.

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