Canaan Inc, a Bitcoin (BTC) mining manufacturing company, is extending its footprint in Kazakhstan after forging new strategic alliances with a number of cryptocurrency mining companies in the country.
Thus, the Nasdaq-listed firm stated that it has deployed 10,300 AvalonMiner units in Kazakhstan as of December 31, 2021. Also, it has completed the first phase of its deployment in Central Asia. As part of its desire to expand outside of China, Canaan is cooperating with local companies. On the other hand, the manufacturer refuses to name any of its local partners.
Furthermore, Canaan, based in Hangzhou, is considering expanding outside the country after China’s massive crackdown on crypto mining in 2021. During a July earnings call, the CEO of the company Nangeng Zhang came out against the mining ban. He told investors that crypto miners make better use of disconnected electricity; and contribute positively to employment and the local economy.
A significant dip in the Bitcoin network’s hashrate
Because China banned the crypto mining sector, Kazakhstan rushed to fill the hole; by providing displaced miners with cheap and plentiful coal. The world’s fifth-largest mining pool constructed a store in Kazakhstan by June 2021. The country accounted for nearly a fifth of global Bitcoin mining volume the following month.
The restriction on Bitcoin mining in China caused a significant dip in the network’s hashrate, although this quickly changed after the relocated miners established new operating bases.
Moreover, the Bitcoin network’s hashrate set a new all-time high record of 207.53 exahashes per second (EH/s) in 2022 after a six-month recovery. The Bitcoin hashrate, which measures the network’s power based on the number of active miners, dropped temporarily. The hashrate decreased to 58.46 EH/s as a direct result of China’s complete ban on crypto; which resulted in a sudden scarcity of miners.
Creating nuclear generation in Kazakhstan to combat electricity shortage
In the second quarter of 2021, the profit of Canaan amounted to $167.5 million. This was the highest volume of quarterly sales in the company’s history, since the 2019 initial public offering (IPO). Nangeng Zhang noted that the good financial performance provided “significant pre-orders” for the equipment. Largely due to the advance payments, the company’s cash at its disposal reached $189 million as of June 30, he added.
Later in the third quarter, the company’s net sale was $204.5 million, up 708.2% from the same period the previous year.
Recall that previously, the authorities of Kazakhstan returned to the issue of creating nuclear generation in the country to combat the shortage of electricity. Due power deficit, which forced crypto miners to leave the Central Asian country. The discussion took place after calculating the production and consumption of electricity until 2035.