Block reward mining rig maker Canaan Inc. (NASDAQ: CAN) recorded an 80% year-on-year dip in revenue in the fourth quarter last year, the company’s financial results have revealed.
This week’s results revealed that the company generated $56.8 million in revenues, an 82.1% dip from the same period a year prior and a 60% dip from Q3 last year. Its total computing power sold dipped 75.8% to 1.9 million Thash/s year-on-year and 45.8% from Q3.
The bright spot was in its mining revenue which hit $10.5 million, a 368% spike from a year prior and 16% from Q3. Canaan’s CFO, James Jin Cheng, attributed the growth to “improved power supply and better mining operations.”
Nangeng Zhang, the company’s chairman and CEO, said the dip was due to the decline in BTC prices, leading to a consequent drop in ASIC demand.
“We went through a tough fourth quarter as the further sinking bitcoin price during the quarter led to lackluster market demand for mining machines as we expected…We strive to endure the present arduous period while simultaneously positioning ourselves for the market’s resurgence,” he stated.
Despite the dip in revenues, Canaan expanded overseas in 2022, setting up new headquarters in Singapore. It also launched new mining machines, the CEO said.
Canaan is just one of several companies in the block reward mining sector that had its toughest year yet in 2022. With BTC losing over 75% of its value, these companies lost their chief source of revenue. Entanglements with some firms that collapsed last year were the last straw.
BTC miners who had taken on large loans when times were rosy faced the most challenging test. Many had to shut down operations and declare bankruptcy, including giants like Compute North and Core Scientific. The latter was brought down by its ties to BlockFi and Celsius Network, two digital asset lenders that went bust last year.
Watch: Blockchain mining & energy innovation
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.