The Bitcoin market has been drowning the red sea along with its counterparts. Amidst constantly crashing projects, the mining industry hasn’t been very profitable. While several filed for bankruptcy a few others have been recording nothing but losses. Canaan, a popular Bitcoin mining platform, revealed that its net income during the third quarter plummeted by 88 percent.
In a recent report, it was brought to light that the firm’s Q3 net income dropped to 6.11 million yuan or $8.6 million when compared to last year.
The amount of computing power sold fell by 48.5% to 3.5 million terahashes per second. This was further followed by its revenue which dropped by 26% to 978.2 million yuan. Addressing the latest drop, Nangeng Zhang the CEO of the firm said in a 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.”
Bitcoin’s plummeting price as well as the surge in energy prices have been proving to be detrimental to miners. At press time, Bitcoin [BTC] was trading for $16,976 with an 18.27 percent drop over the last seven days. While several speculate that Bitcoin’s price could go lower, miner profitability could soon follow suit.
It should be noted that Bitcoin miner profitability is already at its lowest in a year.
Are Bitcoin miners on a selling spree?
As seen in the above chart, miners were barely making any profits through mining. Therefore, an array of them were on a selling spree. Recent data noted that Bitcoin miners were selling more than they have in about five years.
With this sort of strain on miners, the community speculated that the mining industry could be witnessing a significant collapse.