Canaan Q3 Net Income Drops 88% as Bitcoin Mining Declines

Canaan (CAN), a producer of bitcoin mining equipment, said third-quarter net income slumped 88% to 61.1 million yuan ($8.6 million) from the year-earlier period amid what it called negative market dynamics as the price of bitcoin (BTC) slipped to about $16,000.

Total computing power sold dropped 48.5% to 3.5 million terahashes per second, while revenue fell 26% to 978.2 million yuan, the Beijing-based firm said in a statement Monday.

Several mining firms have felt the squeeze over the past few months, notably data center provider Compute North, which filed for bankruptcy in September, while Argo Blockchain (ARGO) and Core Scientific (CORZ) both face liquidity issues.

“The bitcoin mining market deteriorated during the third quarter, as the bitcoin price fluctuated and further dipped to around sixteen thousand dollars recently,” CEO Nangeng Zhang said in the statement. “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.”

James Jin Cheng, Canaan’s CFO, said market conditions are expected to continue deteriorating in light of “bitcoin’s downward trajectory, rising energy prices, and miners under increasing cash pressure.”

Canaan’s Nasdaq-listed shares fell 0.37% to $2.8 in pre-market trading on Monday.