Canaan's revenue in 2020 has shrunk by nearly 70%, and will deploy its self-operated mining business

When the price of bitcoin soars, selling mining machines is not as attractive as mining, Recently, Canaan, the world’s second-largest designer and manufacturer of Bitcoin mining machines, has also begun to deploy its self-operated mining business.

On April 13, Canaan released its financial report before the U.S. stock market. In 2020, it achieved   revenue of $68.6 million compared with $222 million in the same period last year, down 68.59% year-on-year, and the annual revenue shrank by nearly 70%. Affected by this, Canaan's stock price plummeted by more than 29% after the market that day.

Canaan explained that from 2019 to 2020, the overall currency price is not high, and the entire industry is basically in a state of loss. As the price of Bitcoin rises, Canaan's revenue and profit will increase significantly in 2021.

In addition, Canaan stated that the company will conduct self-operated mining operations in North America or Central Asia in the second quarter of this year, and Kazakhstan will be the company's preferred mining area.

In the second half of the year, Canaan will increase its investment in self-operated mining business. By then, it is planned to deploy more than 10% of the total production capacity for the self-operated mining business every month. The deployed machines will consist of A12 and A11 series mining machines, with a total computing power between 350PH and 450PH.

Industry insiders analyze that self-operated mining business can well balance the fluctuations in the Bitcoin market, avoid the occupation of the company's inventory, and help companies create more revenue during the Bitcoin bull market.

However, for investors of Canaan, It should be noted that the share price of Canaan fluctuates violently. The stock shot up from $5 to nearly $40, and then back down to $11.5 within just a few months. As of April 25, 2021, the share price was $13.36.

Author Bio

Xiaoyu Ma, mainly writes about bitcoin-mining companies based in China. He used to be a senior editor of NetEase Finance, a famous financial media in China.