Shares of Canaan are down almost 2% Monday after the Chinese Bitcoin mining gear maker reported a net income decline of 88% in Q3 2022 year-over-year. Canaan said the massive profit slump comes amid the broader crypto market downturn, with Bitcoin dropping 65% year-to-date.
Canaan’s Profit in Q3 2022 Tumbles 88%
Bitcoin equipment maker Canaan reported Q3 financial results Monday, saying its net income in the quarter plummeted 88% to 61.1 million yuan ($8.6 million) relative to the same period last year. The report sent Canaan’s shares down 1.82% on the Nasdaq stock exchange.
Canaan said the total computing power sold stood at 3.5 million Thash/s, down 37.1% from the previous quarter. On an annual basis, total computing power sold declined by 48.5%, reported the Chinese firm.
Revenue came in at RMB978.2 million (US$137.5 million), down 40.8% from Q2 2022. Compared to the same quarter last year, Canaan’s revenue fell 25.8%. Gross profit stood at RMB234.2 million (US$32.9 million) in the most recent quarter, down 74.8% on a sequential basis and 68.4% from Q3 2021.
Canaan CEO Blames Crypto Market Slump for the Weak Quarterly Report
Canaan said weak Q3 results come due to the broader crypto market downturn as inflation and high interest rates continue to weigh on the appeal of risk assets. Bitcoin is currently trading at $16,720, down 65% year-to-date.
“The bitcoin mining market deteriorated during the third quarter, as the bitcoin price fluctuated and further dipped to around sixteen thousand dollars recently. The negative market dynamics have significantly hindered bitcoin miners’ revenues and cash flows. As miners are forced to cut their demand for computing power, we had to adjust down our selling price in response.”
The crypto market took another blow last week amid the turmoil surrounding the crypto exchange FTX, which ultimately filed for bankruptcy. The uncertainty pushed the world’s largest cryptocurrency below the $16,000 mark last Thursday.
Canaan’s new quarterly report does not come as a surprise given that several mining firms have struggled over the past few months. Argo Blockchain reported a 54% profit decline in August, however, the firm’s mining margin increased by 7% in October, according to its latest operational update.
This article originally appeared on The Tokenist
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