Bitcoin mining equipment maker, Canaan, has declared a revenue of $61 million (400 million Yuan) for Q1 2021. This figure is almost its profit for the entire 2020. The Hangzhou-based company revealed in its fourth quarter report stating it made $5.8 million in gross profits for 2020 from a $68 million net revenue.
For last year, its 6.6 million TH/s computing power was sold at $10/TH/s, which is way lower than the average market price. When interests and other expenses, Canaan made a net loss of $33 million, down from $150 million in 2019.
The surge in Bitcoin price did not positively affect Canaan’s revenue as it lacked the required inventory to meet the needs of its customers. In the midst of shortage of mining chip globally, most of the major mining equipment manufacturers in China lacked spot inventory; rather they sold the mining equipment on a preorder basis. The company’s contract liability on preorders as at the end of last year was almost $66 million.
As Bitcoin price rose in Q4, Canaan was optimistic that its revenue would appreciate significantly in 2021 and projected that its total net revenues for Q1 2021 would not be anything less than $61 million (400 million Yuan).
As institutional investments in Bitcoin and other cryptocurrencies increased, there was an increased in demand for mining equipment which saw several millions of dollars’ worth of preorders in Q4.
The Chairman of Canaan, Nangeng Zhang, has said that the company would launch a Bitcoin auto-mining in the second quarter of this year. The computing power for this is put at 350-450 petahashes per second.