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Canaan Reports $5.6M Loss in Q1 Despite Bitcoin Miner Price Cut

China-based bitcoin miner producer Canaan has reported a internet lack of $5.6 million for Q1 2020, though it had lower down the costs for its {hardware} by greater than half in an effort to promote extra machines.

In an earnings report launched on Friday, the agency mentioned it made $9.four million in income for the primary three months this yr with a progress of 44.6% in comparison with the identical interval final yr. But it additionally incurred $9.three million and $5.9 million bills in value of products bought and R&D, respectively.

For that income, Canaan bought 0.9 million terahashes per second (TH/s) of Bitcoin computing energy, which accounts for lower than 1% of the community’s present whole.

That means Canaan had lower down the costs for its mining {hardware} bought within the first three months by greater than 50% to simply $10 per TH/s, reflecting an total slowdown of the shopping for curiosity into mining {hardware} amid Bitcoin’s halving occasion and the COVID-19 pandemic that has disrupted world logistics.

For context, Canaan booked a income of $66.5 million in 2019 with 2.9 million TH/s of Bitcoin computing energy bought, which means the typical costs was round $22 per TH/s final yr. Other main producers have additionally taken an analogous worth lower technique over the previous a number of months.

“The overall market situation since December last year until January had not been too good. So the unit price per TH/s was indeed lower,” Zhang Nangeng, CEO and chairman of Canaan, mentioned in an incomes name on Friday. “And the logistics in mainland China had basically stopped around the Chinese new year due to the COVID-19 pandemic. So even though bitcoin’s price was a higher point in February and early March, the pandemic largely affected our sales.”

The submitting additionally reveals that as of March 31, Canaan had money and money equivalents of $37 million, in comparison with $71 million as of the tip of final yr.

“The decrease was mainly due to higher short-term investments as the Company invested RMB173.4 million (US$24.5 million) in short-term investments as of March 31, 2020,” Canaan mentioned within the report.

Zhang mentioned the agency has partnered China-based Semiconductor Manufacturing International Corporation – along with its current provide chain partnership with Samsung and TSMC – to roll out bitcoin mining gear with 14-nm chips and expects to have the ability to ship in bigger amount in Q2.

But the agency declines to situation a enterprise outlook for Q2 2020 citing the uncertainty of the COVID-19 pandemic and the uncertainties after Bitcoin’s halving offers itself “very limited visibility on the potential impacts to its business and the markets in which it operates.”

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