Canaan Inc. (NASDAQ: CAN) announced its strategic joint agreement for mining Bitcoin with Luna Squares Texas, propelling its stock price by 3.92%.
This partnership seeks to increase the capacity of Bitcoin mining for Canaan in North America by not less than 10 EH/s in mid-year 2025.
Canaan Expands Bitcoin Mining Operations in North America
Canaan Inc. a developer of high-performance computing solutions, announced a partnership with Luna Squares Texas to advance operations for mining Bitcoin.
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This joint mining project will be located at Luna Squares’ location in Willow Wells, Texas. It is still under development, with plans to launch by Q1 2025.
Canaan aims to install 3,480 Avalon A14 and 5,664 Avalon A15 miners at the site. This planned site will have a total hashrate of 1.62 EH/s when operational.
On this basis, the parties agree to share the revenues equally, which will be derived from the Avalon A14 machines. Canaan will initially receive 70% of Avalon A15 revenue until capital costs are recovered, then shift to a 50/50 split.
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This collaborative effort follows Canaan’s strategic plan of developing its North American market and improving mining efficacy.
Strategic Investments Backed by Strong Financial Performance
The expansion affirmation comes after Canaan reported impressive Q3 2024 financial results, with total revenue standing at $73.6 Million. That is a 120.9% year-over-year uptick.
Mining operations were recorded to have a $9 Million contribution towards the company’s total revenues and 147 Bitcoins for the quarter.
Canaan also saw its highest sales of computing power in 11 quarters where it sold 7.3 million TH/s of computing power.
Nangeng Zhang, Canaan’s CEO has emphasized the objective of strategic collaborations and greater mining capabilities as key factors that can spur the firm’s growth. Zhang said,
“The recent expansion of our self-mining activities across Texas and Pennsylvania underscores our commitment to strengthening our mining presence in North America.”
This objective aligns with the partnership with Luna Squares. West Texas has low power costs and fairly good conditions for operations.
Future Outlook: Strengthening Market Presence
Canaan wants to increase mining capacity to achieve a clearer market strategy in delivering Bitcoin mining solutions.
Apart from the Luna Squares partnership, the company is enhancing mining by investing in Stronghold Digital Mining in Pennsylvania.
This involves replacing older models with 6,000 Avalon A14 units, which should reach a combined computing power of 0.9 EH/s by the end of 2024.
Also, Canaan has directed efforts towards the production of high series Avalon A15. Moreover, the orders from important clients such as CleanSpark and HIVE indicate high market demand for these new units.
With these developments, Canaan will continue to benefit from growing Bitcoin prices and increasing global hash rates.
The firm aims to sustain growth in mining and hardware sales through its expanding operations and advanced product offerings.
This is in line with the company’s strategy where it has been raising cash which will reach $72 Million by the end of Q3. These funds will be used to expand mining infrastructure and innovations.
