Despite an ongoing crypto bull market, Bitcoin ASIC manufacturer Canaan reported a decrease in revenue for Q4 2023. The company disclosed a revenue of $49 million, a 16% decrease compared to the same period last year, and a net loss widened to $139 million from $91.6 million in Q4 2022. This decline occurred despite an increase in computing power sold and a recovery in Bitcoin prices. Canaan attributed the revenue drop to selling its ASICs at lower prices and forecasts tougher market conditions ahead, expecting revenues of approximately $33 million and $70 million for Q1 and Q2 2024, respectively. The firm also recognized a non-cash inventory writedown of $55 million due to pricing pressures. Meanwhile, the Bitcoin mining industry faces challenges such as high electricity prices and the upcoming Bitcoin halving in April, which will reduce mining rewards by 50%. Canaan remains hopeful, citing the recent approval and listing of spot Bitcoin ETFs as a positive development for the industry.

Despite an ongoing crypto bull market, it appears that demand for Bitcoin application-specific integrated circuit (ASIC) miners and servers has been lukewarm. On Feb. 27, Bitcoin ASIC manufacturer Canaan reported Q4 2023 earnings. In its report, the company disclosed revenue of $49 million, representing a decrease of 16% compared to the same period last year. Meanwhile, the firm’s net loss widened to $139 million versus $91.6 million in Q4 2022. Despite an increase in the amount of computing power sold and Bitcoin ( BTC ) price recovery, Canaan said that its ASICs were sold at lower prices compared to the market last year. In addition, the firm forecasts tougher market conditions ahead. "For the first quarter of 2024 and the second quarter of 2024, the Company expects total revenues to be approximately US$33 million and US$70 million, respectively, considering the challenging market conditions across the industry," Canaan stated. During the quarter, the firm recognized a non-cash inventory writedown of $55 million due to pricing pressures. Bitcoin has seen stellar gains recently, with a return of 144.4% over the past year. Parallel to the price increase, BTC’s mining difficulty has also doubled to 81.73 trillion during the same period. Coupled with persistently high electricity prices and the next Bitcoin halving in April, where mining rewards will be reduced by 50%, the Bitcoin mining industry will likely face new headwinds even as the coin’s price returns to all-time highs. Canaan writes: "While we acknowledge the persisting challenges of the ongoing bearish market for mining machines, we draw inspiration from the recent approval and listing of spot Bitcoin ETFs. This milestone signals the potential for Bitcoin to attract a larger user base and foster a more concrete consensus in the long run." On Feb. 16, Cointelegraph reported that 20% of Bitcoin miners' hash rate could go offline post-halving due to  lack of profitability. "Given how sensitive the breakevens are for the various ASIC models to Bitcoin price and transaction fees as a percent of rewards, we estimate that between 15 – 20% of network hash rate coming from the ASIC models could come offline," wrote analysts at Galaxy Research. Related: Riot Platforms, other miners still see chip shortage, ESG regs as risks 

Canaan Reports Decrease in Revenue Despite Crypto Bull Market