Chinese Firms Pursue Interests in Canada’s Crypto Space

Despite COVID-19 pandemic continues to impact logistics and the supply of miners from China, Toronto Stock Exchange-listed HIVE Blockchain says it is making delivery of 6,400 next-generation A1246 Bitcoin miners from Canaan to meet its 2021 ASIC capacity goal of 1,000 Petahash per second (PH/s).

HIVE, which owns green energy-powered data centre facilities in Canada, Sweden, and Iceland that produce newly minted digital currencies like Bitcoin and Ethereum on the cloud, notes that the critical purchase of the miners will see its aggregate operating hash rate increase to an estimated 1,229 Petahashes per second by the end of 2021.

These secured purchases will enable HIVE to achieve its goal faster than planned, the company that prides itself as building a bridge from the blockchain sector to traditional capital markets, states. It adds that they are now focused on new opportunities to increase their Bitcoin mining capacity, with a new goal of 2,000 PH/s by the end of 2021.

China’s Canaan will supply them with the AvalonMiner product line in eight batches: the first two batches of 500 miners are expected in May and June, followed by batches of 900 from July onwards through to December. 

“The strength of the bitcoin mining ecosystem depends on the ability of hardware manufacturers to deliver a consistent supply of high-performance hardware,” says Nangeng Zhang, CEO and Chairman of Canaan, on his company’s ability to deliver to customers even during unexpected times. 

In a related news, the Chinese holding company which recently announced it was going into crypto mining, has entered into a non-binding letter of intent to acquire a Canadian-based company that specializes in blockchain technology consulting and operations to extend its reach. 

SOS Ltd says it wants to acquire FXK Tech Corporation which supports cryptocurrency exchanges and cloud crypto algorithmic power exchanges to further extend SOS ecosystem of blockchain and cryptocurrencies, as well as to expand its operations to North America. 

SOS’s shown interest is no guarantee that a definitive agreement will be entered into or that the proposed transaction will go through with FXK, a licensed crypto technology provider in Canada and also design, construct, operate and support exchange platforms of cryptocurrencies and cloud crypto algorithmic power.

Due diligence investigations have to be conducted, negotiation done on a definitive share exchange agreement and approved by directors, as well as the NYSE approving the listing of shares issued in the transaction amongst others. 

However, should the acquisition be completed, SOS Chairman Yandai Wang, says it will be an opportunity for their operations to “be expanded to North America as well as expedite the executions of our strategy in cryptocurrencies and cloud crypto mining and security and insurance.”

Mining activity is at its highest levels since 2017 and prices for second-hand mining machines have climbed to 12-month highs, going by Luxor Technologies market data. Top bitcoin mining manufacturer Bitmain had reportedly sold out through August despite doubling prices of its machines to capitalize on their increased demand resulting from the surge in the price of Bitcoin.

The Bitcoin mining market outlook may still be good for Chinese firms as long-term on-chain metrics remain bullish for Bitcoin despite losing some ground over the past week – lost almost 7% of its value – and a possible further correction, according to Glassnode.