On August 31, 2021, Canaan Inc., the China-based manufacturer of Bitcoin ASIC mining rigs, announced a landmark partnership and purchase agreement with Genesis Digital Assets. Under the terms, Genesis will immediately acquire 20,000 Bitcoin mining machines from Canaan, and holds the option to purchase an additional 180,000 units—potentially the single largest mining hardware deal in history.
Genesis Accelerates Expansion Toward 1.4 GW by 2023
Abdumalik Mirakhmedov, co-founder and executive chairman of Genesis Digital Assets, stated that the newly acquired rigs will be deployed in the company's mining operations across North America and the Nordics, regions where Genesis focuses on renewable energy sources. “These new machines will dramatically increase our capacity as we work towards our goal to increase our capacity to 1.4 gigawatts by the end of 2023,” Mirakhmedov said. The order comes after Genesis previously purchased $93 million worth of ASICs from Canaan in April 2021 and another 10,000 units in mid-June.
Canaan's Stock Down 74% but Deal Signals Confidence
Canaan (Nasdaq: CAN) shares traded at $9.24 on Tuesday, down 74.61% from their peak of $36.40 on March 11, 2021. Despite the price decline, Nangeng Zhang, chairman and CEO of Canaan, expressed optimism. “Since we entered the long-term partnership with Genesis Digital Assets earlier this year, we have reached several great deals. This order with an option of future large purchases further solidifies our collaborations and reflects both parties’ confidence in the prospect of the cryptocurrency mining industry,” Zhang said.
Industry-Wide Mining Rig Orders Surge
The second half of 2020 and the first half of 2021 witnessed an unprecedented wave of large-scale mining hardware purchases. In December 2020, Marathon Digital Holdings acquired 70,000 Antminers from Bitmain for $170 million, while Riot Blockchain purchased 15,000 units. In early August 2021, Marathon ordered another 30,000 miners from Bitmain. Canaan itself sold 11,760 next-generation A1246 Avalonminers to Mawson Infrastructure Group in April. These transactions underscore the intense competition among mining firms to secure hashrate ahead of the next Bitcoin halving and growing network difficulty.