The CEO of Canaan Inc called for a less indiscriminate mining ban in China.
The CEO of Nasdaq-listed Canaan Inc, a China-based firm that specializes in Bitcoin (BTC) mining equipment, argued that China’s Bitcoin mining ban should make allowances for green-energy users during a conference call on Tuesday.
Zhang Nangeng said that an indiscriminate ban on Bitcoin mining failed to take into account the potential economic benefits that could arise from embracing green-energy mining. Zhang stated that mining could present a solution to the oversupply of electricity in certain regions of the country, where resultant low energy prices already attract miners.
“For-profit miners prefer regions with low electricity prices that indicate oversupply, and likely energy waste. Bitcoin miners also help create jobs in impoverished regions and contribute to fiscal coffers,” said Zhang.
Canaan’s stock price increased 24% on Tuesday, adding to 42% growth for the week. The surge in Canaan’s share price came amid the release of the firm’s financial results for the first quarter of the year, which show spectacular growth since this time in 2020.
The company’s revenue grew 490% year-on-year, primarily from the sale of its ASIC mining equipment. The company also recorded a net income of $22.4 million after recording a net loss of $5.9 million the year before.
“Our financial performance improved significantly in the quarter, driven by the Bitcoin price rally, higher customer demand for quality mining machines, and our ability to ramp up mining machine production and deliveries,” wrote Nangeng in the quarterly report.
The surge in the firm’s share price represents a swift turnaround after it sunk 41% over the course of the previous month amid the Bitcoin price drop. The firm’s business outlook predicted an increase in sales but stopped short of providing further financial guidance due to the volatility in the value of Bitcoin, which has a knock-on effect on mining demand.
“The Company recognizes that the trends in Bitcoin prices are currently hard to predict and cannot provide financial guidance due to Bitcoin's price volatility in late May of this year,” the report stated.