Chinese mining giant Canaan doubles profits despite the blanket crypto ban

Main Chinese language cryptocurrency miner producer Canaan seems to haven’t any points with the native ban on crypto, as the corporate’s total efficiency has continued to develop in 2022.

Canaan formally announced monetary outcomes for the second quarter of 2022 on Thursday, reporting a 117% enhance in gross revenue from the identical interval of 2021. Based on the agency, the Q2 income amounted to 930 million renminbi (RMB), or practically $139 million.

The corporate’s Q2 internet revenue was 608 million RMB, or $91 million, or a 149% enhance from 425 million RMB in the identical interval final yr. Canaan famous that overseas foreign money translation adjustment in Q2 was an revenue in comparison with earlier losses as a result of U.S. greenback appreciation towards RMB throughout Q2.

Regardless of posting vital income, Canaan has discovered the second quarter a difficult interval as a result of Bitcoin (BTC) plummeting beneath $20,000 in June, the corporate’s CEO Nangeng Zhang stated.

“The COVID-19 containment lockdown in key cities in China additionally introduced extreme disruptions to our day by day operations and demand for our AI chips,” he famous.

Zhang talked about that Canaan has been increasing its international presence, significantly establishing worldwide headquarters in Singapore. The agency has additionally been working to scale its mining enterprise, producing extra BTC with an improved energy provide. As of late June, Canaan held a complete of 346.84 BTC, or $8.1 million, the CEO stated, including:

“We’re totally conscious of the downward stress from the Bitcoin value for the reason that final fourth quarter and anticipate it to convey extended headwinds to our efficiency within the coming quarters. However, we imagine within the distinctive worth of Bitcoin and its long-term prospects.”

Canaan’s chief monetary officer James Jin Cheng echoed the CEO’s remarks, stating that the corporate expects a more durable market atmosphere from the decrease Bitcoin value degree in addition to elevated vitality value and numerous pandemic and geopolitical uncertainties. He said:

“Because the Bitcoin value additional decreased within the second quarter, we responsively lowered our product value for spot gross sales to shoulder the stress with our purchasers. […] We anticipate the gross margin to lower dramatically within the second half of this yr.”

The continuing cryptocurrency winter shouldn’t be the one concern of crypto mining firms in China although. As beforehand reported, China introduced a blanket ban on all crypto operations — together with mining and buying and selling — in September 2021, pushing many companies to drive international enlargement and escape to different international locations. Previous to the ban, China was taking down a number of crypto mining farms in a transfer to avoid wasting vitality and curb crypto operations within the nation.

Associated: Bitcoin mining income jumps 68.6% from the lowest-earning day of 2022

Apparently, the “nice Chinese language crypto ban” has not affected native crypto lovers and companies an excessive amount of as far as China reemerged because the second-largest Bitcoin mining nation by January 2022. Based on information from the Cambridge Bitcoin Electrical energy Consumption Index, China nonetheless hosts 21% of the whole international Bitcoin hash price, following solely the USA, which produces 38%.

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