Canaan Inc. liquidated its entire Ethereum position and a portion of its Bitcoin holdings in late August 2026, using the proceeds to repurchase American Depositary Shares while reporting a significant decline in mining-equipment revenue. The move highlights a strategic pivot toward shareholder value extraction from its digital asset treasury as core business fundamentals weaken.
During the month, Canaan mined 44 BTC and maintained a non-joint venture installed hashrate of 10.05 EH/s. The company's joint venture hashrate reached 4.92 EH/s by the end of August, continuing its expansion. Operational developments also included progress on a compute heat recovery greenhouse project in Canada, where equipment installation is currently underway prior to the winter heating season.
The financial core of the recent activity involved the monetization of digital assets. Canaan sold its entire 3,952 ETH position at a rate close to $2,400 per Ethereum. Additionally, the company sold 54 bitcoins for roughly $79,000 per BTC. These transactions generated approximately $13.9 million in cash proceeds. Management described the market conditions at the time of sale as relatively favorable.
From this total, Canaan allocated approximately $5.4 million to buy back 13.6 million ADSs. Management stated that the repurchases reflect confidence in the company's strategy. This transaction brings the total ADSs repurchased since the start of the year to 16.4 million. Despite the sales, Canaan retained a substantial treasury of 1,868 BTC by the end of August, signaling a continued commitment to holding Bitcoin strategically.
The buybacks come against a backdrop of deteriorating core business performance. In the second quarter of fiscal year 2026, product revenue fell to $13.6 million, down from $71.9 million in the same period last year. Mining revenue also declined, dropping from $28.1 million in Q2 FY25 to $17.7 million for the reported quarter. The company attributed this weakness to lower average selling prices driven by deflated bitcoin prices and reduced demand for mining equipment.
Institutional sentiment toward Canaan remains cautious. Data tracked by Insider Monkey across more than 1,000 hedge funds shows that only six funds held long-term positions in Canaan by the end of Q2 2026, unchanged from the previous quarter. Short interest stood at 8.90%, indicating a moderately high level of speculative betting against the stock. According to Yahoo Finance data, Invesco is the largest institutional stakeholder with 40.4 million shares, or 5.39% of outstanding shares, as of June 30. Other notable investors include Weiss Asset Management at 5.19% and Galaxy Digital at 1.56%.
Risks persist for the company, including bitcoin price volatility which could impact both future mining revenue and the value of its remaining 1,868 BTC holding. Execution risk remains for the Canadian greenhouse project, as delays before winter could affect timelines and returns. Furthermore, continued ADS repurchases reduce cash reserves, potentially limiting operational flexibility. Selling digital assets at specific prices also exposes Canaan to opportunity costs if market conditions shift favorably in the future.