Chinese manufacturer of Bitcoin miners Ebang announced losses of nearly $7 million in the first half of 2020.
In fact, the measures taken to contain the coronavirus pandemic had a major impact on the company’s production capacity this year, causing a reduction of terahash per second (TH/s) of hashpower sold by 86% compared to the same period in 2019.
This led Ebang International Holdings Inc. to close the first six months of the year with a net loss of $6.96 million, with revenues plummeting 51% from $22.35 million to $11.04 million, compared to much smaller reductions in operating expenses.
Ebang, the Bitcoin miner doesn’t lose on the stock exchange
In spite of this, the price of EBON shares listed on the Nasdaq during the year rose sharply from around $4.5 at the beginning to the current $9.8.
Evidently, investors believe that the problems of the first half of the year can be solved through the easing of the pandemic containment measures.
It is worth mentioning, however, that yesterday the price of Ebang shares rose to a peak of $11.18 and then fell to $9.73 after the news about the losses.
In the six-month period, the Nasdaq-listed Ebang sold a total of 0.25 million terahash per second (TH/s) of Bitcoin hashpower. This figure represents a year-on-year decrease of 86% compared to 1.82 million TH/s sold in the same period of 2019.
According to Ebang’s Chairman and CEO, Dong Hu, the losses are due to the global economic recession induced by Covid-19, the Bitcoin halving of May 11th, and the virus containment measures such as travel restrictions, mandatory quarantine and suspension of business activities. These have caused serious disruptions to company operations, negatively affecting production, results of operations and financial conditions.
“Our chip suppliers have reduced their production capacity due to the impact of the Covid-19, resulting in our shortage of raw materials during the first six months of 2020”.
Other Bitcoin miners also report similar losses due to the collapse in demand, although the hashrate of the Bitcoin network is at an all-time high.
In fact, after the peak reached on the day of the halving, and the following decline, the hashrate seemed to have more or less stabilized, but from September it started to grow again, setting new historical records. This could mean an increase in demand for miners in the second half of the year.