Two Contrary Bitcoin Tales: How Crypto Mining Equipment Is Buoying Nvidia's Numbers and Pushing Down Canaan's

Nvidia Corporation NVDA said on its annual investor day it is raising its first-quarter revenue estimate for newly introduced mining hardware. At the same time, supply chain issues overshadowed cryptocurrency-centric Canaan Inc’s CAN Q4 numbers.

What Happened: Nvidia said it is revising its Q1 revenue estimate for its CMP product meant for industrial-scale cryptocurrency mining to $150 million, which is three times more than the $50 million previously expected. 

“We are experiencing broad-based strength, with all our market platforms driving upside to our initial outlook,” said Colette Kress, CFO of NVIDIA.

“Overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean. We expect demand to continue to exceed supply for much of this year,” said Kress.

On the other side of the coin, Canaan said supply chain disruptions caused by COVID-19 had impacted its revenues in the fourth quarter of 2020.

“Due to supply chain disruptions, as the price of Bitcoin rallied in late 2020, we experienced a surge of demand for high-quality mining machines both in and outside of China,” said Tong He, CFO of Canaan.

Why It Matters: Canaan said its Q4 2020 revenues fell to RMB 38.2 million ($5.9 million) from RMB 463.2 million ($70.72 million) a year ago and RMB 163 million ($24.9 million) in the preceding quarter. 

The Hangzhou, China-based company said that year-over-year and quarter-over-quarter declines “were mainly due to the decreases in total computing power sold.”

“In the fourth quarter of 2020, although the market demand increased significantly with the rising of Bitcoin’s price, the Company did not have sufficient inventory to deliver to its customers,” said the company in a statement.

Bitcoin (BTC) traded 0.78% higher at $60,323.33 at press time, while Ethereum (ETH) traded 0.54% higher at $2,156.64.

See Also: Bitcoin Mining Equipment Company Canaan Sued By Investor Alleging Securities Law Violations

Nvidia, meanwhile, said that while its Q1 2022 is not yet complete total revenue for the period is tracking above the $5.3 billion outlook it provided at its fiscal year-end earnings call.

In February, it was reported that Nvidia raked in between $100-300 million from Ethereum miners in the fourth quarter despite facing a graphics processing unit crunch.

Price Action: Nvidia shares closed almost 5.6% higher at $608.36 on Monday in the regular session and fell 0.38% in the after-hours trading. On the same day, Canaan shares slid almost 30% in the regular session to $13.14 and rose 1.14% in the after-hours trading to $13.29.

Read Next: Unlike Nvidia, AMD Doesn't Mind If You Use Its Gaming GPUs To Mine Ethereum