By Richard Hines
Canaan, a Bitcoin mining equipment manufacturing firm, is feeling the heat of the bear season, with sales down by over 80% from its all-time high this year as Bitcoin fell under the $15,000 mark.
The market drop has also had an impact on the revenue generated by Bitcoin miners, as there was a decrease in demand for machinery and inflated energy prices.
Decline In Demand For Machineries
The raging bear market shook the mining industry, impacting both manufacturers and miners. Miners’ revenues and cash flows have decreased as a result of a need to reduce the computing power utilized for mining. Manufacturers were also impacted by this action, as frequent demand for manufacturing and supply of equipment reduced.
According to Canaan’s CFO, James Jin Cheng, this decline in Cannan’s revenue will continue as long as Bitcoin continues to fall and miners continue to face high energy prices; with miners being more conservative in their machinery and energy use.
James further attributed the drop in their market sales to the crypto space’s reduced machinery demand in the third quarter. To fit in and survive in this declining market, the firm had to realign its sales and price strategy as miners became more cautious of their machinery usage.
This resulted in a drop in machinery invention as demand fell, as did manufacturing companies’ selling prices. To survive in this market, the Canaan firm has implemented cash-tightening techniques to reduce expenses and manage machinery production.
Developments In Place For Bull Season
The firm’s attention will now be concentrated on research into new creative machineries and development of these machineries. This new plan is in motion to improve the firm’s working conditions while also preparing it to scale tremendously when the market enters the bull season.
In addition to this advancement, the company is planning to expand its headquarters in Singapore, backing this expansion by research and additional talent, in order to propel the firm to the global stage.
Furthermore, the manufacturing company has expanded its dealings to the United States to increase its reach of their equipment to mining firms.
In spite of the bear market, the company continues to plan how to increase its network and expand in order to be ready for the bull season. During this quarter, increased computing power generated 62 million in mining revenue.
Also, the Canaan firm launched the Avalon Made 13 mining equipment in late October. This device promises to offer increased computing speed and power efficiency.