Canaan Inc., the China-based manufacturer of Bitcoin ASIC mining rigs, announced a major partnership with Genesis Digital Assets, a global Bitcoin mining company. The two firms have signed a purchase order for 20,000 Bitcoin miners, with Genesis holding the option to acquire up to 180,000 additional units in what could become the largest mining machine deal to date.
Scaling Up Operations
The deal is the latest in a series of transactions between Canaan and Genesis. In April 2021, Canaan sold 11,760 next-generation A1246 Avalonminers to Mawson Infrastructure Group. Later that month, Genesis purchased $93 million worth of ASICs from Canaan, followed by another 10,000 units in mid-June. The August 31 agreement deepens their collaboration.
Abdumalik Mirakhmedov, co-founder and executive chairman of Genesis Digital Assets, stated: “The Bitcoin mining machines from this latest purchase order are part of our ongoing efforts to rapidly scale our operations in North America and the Nordics, where we focus on renewable energy sources. These new machines will dramatically increase our capacity as we work toward our goal of 1.4 gigawatts by the end of 2023.”
Canaan's Stock Performance
Canaan (Nasdaq: CAN) shares have faced a significant decline, trading at $9.24 per share on August 31, down 74.61% from their March 2021 peak of $36.40. Nangeng Zhang, Canaan’s chairman and CEO, commented: “Since entering the long-term partnership with Genesis earlier this year, we’ve reached several great deals. This order with an option for future large purchases further solidifies our collaboration and reflects both parties' confidence in the cryptocurrency mining industry.”
The Bitcoin mining hardware market has experienced explosive growth since late 2020. Marathon Digital Holdings made a record-breaking acquisition of 70,000 Bitmain miners in December 2020, and Riot Blockchain purchased 15,000 Antminers that same month. In August 2021, Marathon bought another 30,000 miners from Bitmain. The Canaan-Genesis deal underscores the ongoing arms race among mining firms to secure hashing power.
By securing up to 200,000 miners (including the option), Genesis positions itself to dramatically boost its computational capacity, while Canaan locks in a major revenue stream and reinforces its market presence against competitors like Bitmain.