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Home » Canaan prepares for Bitcoin halving with $50 million

Canaan prepares for Bitcoin halving with $50 million

Canaan, manufacturer of the Avalon miners, will face the next Bitcoin halving with a million-dollar investment to improve its equipment offering at both research, development and production levels.

Canaan received $50,000 million through the issuance and sale of privileged shares or Preferred shares. He document The company's filing with the SEC does not name the buyer of these shares. However, it details that the purpose of this amount would be “research and development, expansion of production scale and other general corporate purposes”.

Although the price of its shares had a significant decline At the end of 2023, Canaan also recently increased compared to the previous year's figures a cash injection Thanks to the sale of more than 17,000 Bitcoin miners to the companies Cipher Mining and Stronghold Digital Mining.

Bitcoin's halving is getting closer

Canaan's interest in optimizing everything related to mining hardware development and production makes sense considering the next Bitcoin halving is approaching less than 100 days happen.

He halving It is a scheduled event in the Bitcoin protocol that occurs automatically every 210,000 blocks mined. This takes about four years on average and consists of dividing the issuance of BTC in half.

Currently, each mined block generates 6.25 new Bitcoins, which the miner who added the block to the chain receives as a reward. After the halving, this reward will be 3,125 BTC.

If the issuance of Bitcoins declines and the price of this currency does not rise sufficiently in the market, miners' profits could be severely affected. On the other hand, if the price of Bitcoin increases, it is still more profitable to increase mining power and efficiency before this event in order to accumulate as much BTC as possible.

Given these scenarios, Canaan's strategy could be opportune if the company wants to offer equipment that can keep it on par with the competition in producing Bitcoin miners.

At CriptoNoticias, we recently reported that 17 mining companies, including names like Core Scientific, Marathon Digital Holdings Inc and Bitfarms, reported that their hash costs (cost per hash rate contributed to Bitcoin) were $40/PH/s per day or more fraud.

Miner profitability today is $74/PH/day. If this continues, the halving could leave these companies in the red as they would spend more than they would receive for this activity.

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