Apparently, not all mining companies are in good shape. Canaan Creative – the largest mining facility in China after Bitmain – has announced that sales seriously dropped during quarter one of 2020, and that the company has lost nearly $6 million despite significantly lowering prices on all its mining equipment.
Canaan Creative Takes a Nasty Hit
In all, Canaan has lowered the prices of all its mining machines by half in the past few months, but this hasn’t been enough to keep revenue streams from flowing in. At press time, the company reports that approximately $5.6 million has been lost between Q1 of 2019 and early 2020. While Canaan made just shy of $10 million in this department, expenses were just close to $6 million, meaning the company’s spending was near the same level as its earnings despite an alleged 44 percent growth rate.
The problem may have been the recent halving. Miners and other figures in the crypto space realized that mining was about to become a far-less profitable trade considering rewards were about to be cut in half, hence the term halving. Bitcoin mining rewards fell on Tuesday, May 12 from 12.5 BTC (where they had stood since mid-2016) to about 6.25 BTC. The currency will likely undergo another halving in the year 2024, meaning that rewards will then be knocked down to just over three BTC.
At this stage, many are looking at the mining business as a weak enterprise. In addition, the price of bitcoin is affecting operations as well. Bitcoin mining isn’t likely to be progressive unless the currency is above the $7,000 range, and while it is for the time being, the asset has experienced volatility like no other time in its “life” over these past few months due to the ongoing coronavirus pandemic, making many wonder what the currency’s future holds.
For the most part, bitcoin mining operations have suffered since the beginning of the year due to halving anticipation and the spread of COVID alike. Bitcoin mining is not considered an essential business, which means that many operations have been forced to close their doors, though some say that employees and miners are continuing extraction processes remotely.
Losses Aren’t Everywhere
In the middle of all the chaos and hoopla, however, have emerged some thin rays of hope in the forms of Bitmain and MicroBT, both of which stem from China. Bitmain reports that sales of its Antminer S19 Pro machines are still up despite the present circumstances, while MicroBT has explained that its Whatsminer M30S++ devices have continued to attract purchasers, so perhaps the art of bitcoin extraction isn’t as dead as one might think.