Canaan (NASDAQ: CAN) reported an $8 million net profit for the third quarter, driven entirely by mark-to-market gains on its Bitcoin holdings rather than its core business of manufacturing mining equipment. According to Bitcoin Magazine, the company recorded a $51.9 million fair-value gain on cryptocurrency assets, which offset an operating loss and turned the bottom line positive. The accounting gain stands in stark contrast to the company's collapsing hardware business: mining-machine sales plummeted 96% year-over-year, falling from $118.6 million to just $4.8 million. Total revenue for the quarter dropped 90% to $14.5 million, as reported by The Block.
The divergence between paper profits and operational performance extends across the sector. Bitdeer Technologies reported record third-quarter revenue of $320.7 million alongside a surge in Bitcoin production—the company mined 3,855 BTC, representing a 248% increase year-over-year, according to The Block. Despite the top-line growth, the company's net losses widened to $125.5 million, illustrating the rising costs and capital expenditures associated with scaling mining operations even as Bitcoin's price appreciation boosted the value of produced assets.
Bitmine faced an even starker valuation gap, posting a $6.3 billion net loss for its latest fiscal year driven by a 44% decline in ether prices. The company disclosed that approximately $6.23 billion of the net loss stemmed from unrealized fair value losses on digital asset holdings, per an SEC filing cited by The Block. The massive paper loss reflects accounting standards requiring public companies to mark digital assets to market prices, creating volatility in reported earnings that does not necessarily correspond with cash flow or operational performance.
The quarterly results highlight how mining firms' financial statements increasingly reflect cryptocurrency price movements rather than underlying business operations. Canaan's $51.9 million fair-value gain generated net income despite the 96% collapse in equipment sales, while Bitmine's balance sheet suffered billions in paper losses from the same accounting treatment applied to ether's decline. Bitdeer's widening losses amid record production volumes similarly demonstrate that rising Bitcoin prices do not automatically translate to profitability when matched against energy costs, facility expansions, and depreciation on mining infrastructure. These mark-to-market adjustments, combined with depressed demand for mining hardware following the previous year's expansion cycle, have created a reporting environment where traditional revenue metrics provide an incomplete picture. For investors attempting to distinguish between sustainable cash-generating operations and portfolio valuation swings, the third-quarter earnings present a complex landscape of an industry navigating both volatile crypto markets and a structural downturn in equipment demand.