Canaan Records $148 Million in Losses for 2019

Canaan Creative, a Bitcoin mining hardware maker, has reported a net loss of $148.6 million for 2019, according to a filing with the Securities and Exchange Commission (SEC).

The regulatory filing was the first unaudited earnings report submitted by the company following its dull initial public offering (IPO) last year on a United States-based exchange, raising $90 million.

The company detailed that since its IPO, it sold a total computing power of 10.5 exhashes per second (EH/s) - 20 percent of the total Bitcoin network’s Hash Rate Hash Rate A hash rate is the measure of a cryptocurrency miner’s performance and a key security metric. In the context of mining, the more hashing or computing power in a given network, the greater its security and its overall resistance to attackMining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack. Hash rate is also a measurement of the output of a device that is used to add transactions to a blockchain A hash rate is the measure of a cryptocurrency miner’s performance and a key security metric. In the context of mining, the more hashing or computing power in a given network, the greater its security and its overall resistance to attackMining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack. Hash rate is also a measurement of the output of a device that is used to add transactions to a blockchain Read this Term growth last year.

The losses were reported on total yearly revenue of $204.3 million, compared to the previous year's number of around $384 million.

This shows a significant decline in the company’s miner selling business.

Notably, the Chinese company’s poor numbers were due to its loss of $115.1 million in the last quarter of this year, compared to $10.6 million from the same period in 2018.

Decreasing demand for miners

Founded in 2013, Canaan sells computer equipment under its “Avalon” brand. According to its SEC filing, it controls 15 percent of the global market for bitcoin mining chips and computer equipment, which makes it the second-largest company in the sector following Bitmain.

Despite a surge in the sales in October and November, the Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term in Bitcoin prices resulted in a significant drop in volume in December, Nangeng Zhang, founder and CEO of Canaan, clarified.

“As a result of the impact of the COVID-19 outbreak, a widespread health crisis that adversely affected general commercial activities, the economies, financial markets, as well as the cryptocurrency market activities, we have lowered our expectations for business in the year of 2020,” the report stated. “For the first quarter of 2020, the Company expects total revenues not less than RMB60 million (around $8.5 million).”

Meanwhile, the company was also slapped with a class-action lawsuit in the US for misleading its investors by providing false information about the financial health and operation status of the company in the IPO filings.

While Canaan is struggling with its business, two exchange-listed Bitcoin miners - Argo Blockchain and Hut8 - posted record numbers recently.