The actions of Canaan Inc, one of the few publicly traded Bitcoin mining hardware manufacturers, suffered significant losses. According to its first quarterly report, the shares of the Chinese firm in Nasdaq, have fallen below 2 points.
Although the company has suffered constant losses since last year, the last month, they have been accentuated. Some data companies show that the stock slump, after closing on Monday, stands at 1.89. This represents a significant drop of 0.22 points with respect to the day on Friday.
This is a new setback from the manufacturer to mine Bitcoin, which is trying to recover from the losses. Halving, which halved the productivity of its machines on the one hand, and the trade delays brought about by the Covid-19 pandemic on the other, have been shoe stones for the firm.
The Halving was harsh with the hardware maker to mine Bitcoin
The data shown in the first quarterly report, compared to the same period last year, shows some level of recovery. Despite this, since the Halving of Bitcoin, the company’s shares in Nasdaq have progressively fallen.
Bitcoin’s Halving cut the rewards in this currency in half. They, who paid miners 12.5 BTC per mined block, now deliver 6.25 BTC for the same work. Added to this, the price of the main cryptocurrency has remained in the same band before and after the cut.
These events have caused consternation in the company that makes Bitcoin mining hardware. Such is the magnitude that, since the date of the Halving, its shares in the stock market have plummeted and have only had two positive closings since May 14.
To illustrate an example, from May 14 to 15, the company’s shares closed at -1.57. This is a significantly large number for a single trading day. Before the cut, these shares had been slowly recovering since the beginning of April.
Contrast with the first quarterly report
The recent losses in Nasdaq shares of the mining maker Bitcoin seem to affect the progress of the first quarter of the year. In the aforementioned report published by the firm, the numbers are significantly better than those presented in the same time period last year.
In the document, it is specified that there was an increase in equipment sales, measured in terasahes. It would have been 18.4% compared to the first quarter of last year. While net income was 44.6% in the same time comparison.
Nangeng Zhang, Canaan’s president and CEO, assured that the key to this rebound would have been the improvements in the offers. The Bitcoin miners marketed by the manufacturer, he explains, present improvements in terms of reducing maintenance costs thanks to the introduction of “A series of SaaS solutions”.
“We further improve the quality of our product offerings and strengthen our value propositions. This allowed us to minimize the impact of fluctuations in the price of Bitcoin and derivatives after Halving. In the future, we hope that our commitment will drive growth and help us create sustainable value for our shareholders, “said Zhang.
Canaan Creatives in the China 2025 Plan
It should be noted that the importance of Cannan is such that this Bitcoin mining manufacturer is part of a select list of companies from China. They are pieces of the plan “Made in China 2025”, Which consists of 70% of the internal demand for semiconductors coming from local companies, according to Harvard Review.
That list also includes Canaan’s partner, SMIC, a company dedicated to the massive creation of Chips. Currently, both companies are working together on the development of 14nm chips, with the aim of closing the gap with giants like Samsung, who lead the market in this matter.
Data to take into account
- From Halving until the closing of this Monday, Canaan shares in Nasdaq fell 4 points.
- Canaan’s shares on Nasdaq were at 12.57 in December 2019.
- Sales at the mining company Bitcoin, held by TH, were 0.9 million terahash during the first quarter of 2020. In the same period of 2019, they were 0.7 million TH.
- The company’s total net income in the first quarter of 2020, was 68.3 million yuan. On the same date in 2019, they were 47.2 million.
- SaaS or Software as a Services, is a solution to improve the performance of computer equipment, offering Cloud services.
The information in this content has been extracted from reliable sources detailed below:
1- Content professionally managed by the authors of CriptoTendencia.
2- External sources: Investor.canaan-creative.com, Finance.yahoo.com, Investing.com, Harvard Review Latin America.