Main Chinese language cryptocurrency miner producer Canaan seems to haven’t any points with the native ban on crypto, as the corporate’s general efficiency has continued to develop in 2022.
Canaan formally announced monetary outcomes for the second quarter of 2022 on Thursday, reporting a 117% improve in gross revenue from the identical interval of 2021. Based on the agency, the Q2 earnings amounted to 930 million renminbi (RMB), or almost $139 million.
The corporate’s Q2 web revenue was 608 million RMB, or $91 million, or a 149% improve from 425 million RMB in the identical interval final yr. Canaan famous that overseas forex 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 earnings, Canaan has discovered the second quarter a difficult interval on account of Bitcoin (BTC) plummeting under $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, notably 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 absolutely 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. Nonetheless, 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 harder market atmosphere from the decrease Bitcoin value stage 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 continued cryptocurrency winter just isn’t the one concern of crypto mining corporations 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 pressure international growth and escape to different international locations. Previous to the ban, China was taking down a number of crypto mining farms in a transfer to save lots of vitality and curb crypto operations within the nation.
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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 overall international Bitcoin hash charge, following solely the USA, which produces 38%.