Rosenblatt Lowers Canaan Price Target Amid Weakening Bitcoin Mining Demand

Weakening Bitcoin Mining Demand: Rosenblatt Lowers Price Target for Canaan

Rosenblatt has reduced the price target for Canaan Inc. (NASDAQ: CAN) from $4.00 to $2.50, while maintaining a "Buy" rating for the cryptocurrency mining equipment manufacturer. Currently, Canaan's stock is trading at $0.59, having fallen nearly 69% over the past year, with analyst price targets ranging between $1.75 and $4.00.

The downgrade is attributed to expectations of declining demand for new mining equipment due to the continuously falling Bitcoin price. According to Rosenblatt, market estimates suggest that the break-even point for professional Bitcoin mining operations is around $90,000, which influences equipment purchasing decisions.

"Despite the lowered price target, Rosenblatt continues to recognize the Canaan management's strategy to improve equipment efficiency through the development of state-of-the-art ASICs (application-specific integrated circuits)."

Rosenblatt has adjusted its revenue forecasts for Canaan's equipment sales and self-mining business for 2026, now based on an average Bitcoin price of $100,000, down from a previous estimate of $120,000. Investors should note that Canaan has more cash than debt on its balance sheet, with the next quarterly report scheduled for February 10.

In further news, Canaan reported an 82% increase in its installed hashrate to 9.91 EH/s by the end of December 2025, alongside a 61% year-over-year growth in operational hashrate. The company also announced mining 86 Bitcoin in December, raising its cryptocurrency holdings to a record 1,750 BTC and 3,951 ETH, a 35% increase in Bitcoin holdings compared to the previous year.

Canaan has renewed its $30 million stock buyback program, allowing for the repurchase of outstanding American Depositary Shares over the next 12 months, following the expiration of a previous buyback initiative where the company repurchased shares worth approximately $4.9 million.

Additionally, Canaan has launched a 3 MW proof-of-concept project in Manitoba, Canada, to utilize waste heat from its mining operations for greenhouse heating, in collaboration with Bitforest Investment Ltd. However, Canaan has also received a deficiency notice from NASDAQ for failing to maintain a minimum bid price of $1.00 per share for 30 consecutive business days, in accordance with NASDAQ listing rule 5550(a)(2).

Key Takeaways:

• Rosenblatt lowers Canaan's price target to $2.50 while maintaining a "Buy" rating.
• Canaan's stock has fallen nearly 69% over the past year.
• Installed hashrate increased by 82% to 9.91 EH/s by December 2025.

Largest Downward Adjustment in Years: Bitcoin Network Difficulty Drops by Over 11%

The global Bitcoin network, secured by the computing power of specialized ASIC miners, currently has a hashrate of approximately 950 EH/s. Based on an average energy efficiency of about 25 joules per terahash, this corresponds to an electrical power of around 24 gigawatts supporting the Bitcoin network.

The Bitcoin protocol aims for an average block time of ten minutes. When available computing power increases, new blocks are found faster, shortening the block time. Conversely, a decrease in hashrate extends the time between blocks. The last difficulty adjustment occurred on February 7, with block 935424, where the difficulty dropped from 141.67 trillion to 125.86 trillion, marking a decrease of approximately 11.2%.

This adjustment represents the largest negative change since July 2021 and the tenth-largest downward correction in the history of the Bitcoin network. The previous significant drop in July 2021 saw the difficulty fall from 19.93 trillion to 14.36 trillion, a decrease of 28% due to extensive anti-crypto measures by the Chinese government.

Weather-related stress on power grids played a central role in the current correction, as a severe winter storm in the U.S. led to overloaded power networks, causing local Bitcoin miners to temporarily halt or reduce operations. Following the difficulty adjustment on February 7, the hashrate has begun to recover, with block times recently shortening to around nine minutes.

Key Takeaways:

• Bitcoin network difficulty dropped by 11.2%, the largest adjustment since July 2021.
• Weather-related issues contributed to the decline in hashrate and block production.
• Hashrate is gradually recovering, with block times improving.

Bitcoin Miner NFN8 Files for Bankruptcy Following Fire

The NFN8 Group Inc. filed for Chapter 11 bankruptcy protection on February 2, 2026, after a major fire at its Texas facility reduced mining capacity by over 50%, exacerbating the financial strain on the operator. The company's operations will continue under strict court supervision while its assets are evaluated for potential bidders.

This filing comes as a surprise to many who have witnessed the rapid growth of NFN8 in recent years. The fire occurred at a rented facility in Crystal City, Texas, during a time when global mining profitability was declining due to falling hash prices following the Bitcoin halving in April 2024.

NFN8 secured $2.75 million in financing from Twelve Bridge Capital LLC to maintain operations during the court-supervised asset sale. The company previously operated over 5,000 Bitcoin mining machines in Texas and Iowa but faced significant challenges due to a combination of catastrophic events and lower hash prices.

Key Takeaways:

• NFN8 filed for Chapter 11 bankruptcy after a fire reduced mining capacity by over 50%.
• The company secured $2.75 million in financing to maintain operations during the bankruptcy process.
• NFN8's situation reflects broader trends in the mining industry facing profitability challenges.

Morgan Stanley Supports Cipher and TeraWulf, Cautions on Marathon

Morgan Stanley has initiated coverage on three Bitcoin mining companies, rating Cipher Mining and TeraWulf with "Overweight" while assigning an "Underweight" rating to Marathon Digital. The bank argues that the data centers of Cipher and TeraWulf should be valued as infrastructure assets with long-term, stable cash flows rather than as pure Bitcoin investments.

Analyst Stephen Byrd noted that the stock prices of Cipher and TeraWulf rose significantly following the announcement, with Cipher's stock increasing by 12.4% to $16.51 and TeraWulf's by 12.8% to $16.12. In contrast, Marathon Digital's stock was slightly higher at $8.28, with a price target set at $8.00.

Byrd emphasized that once a mining company establishes a data center and secures a long-term lease with a reliable partner, the asset is better suited for investors seeking steady cash flows rather than those focused on Bitcoin price fluctuations.

Key Takeaways:

• Morgan Stanley rates Cipher and TeraWulf as "Overweight" and Marathon as "Underweight."
• Cipher and TeraWulf's data centers are viewed as infrastructure assets with stable cash flows.
• Marathon's hybrid strategy raises concerns about its long-term profitability.

Can Mining Companies Save the Appeal of Cryptocurrency?

Despite the slowdown in Bitcoin prices, cryptocurrency mining companies are thriving, with leading mining stocks rising due to expectations of a shift towards artificial intelligence (AI). Cango recently sold securities worth $305 million to strengthen its balance sheet, indicating a strategic pivot towards AI computing infrastructure.

Mining companies are still active in the market, even as some unprofitable mining operations are being shut down. The stocks of leading crypto mining companies have seen significant gains, with IREN and others showing strength, while MARA stocks have struggled.

Some miners are producing at costs above market prices, but established operations remain profitable. Cango's recent sale of 4,451 BTC for $305 million was aimed at reducing debt and funding its transition to AI infrastructure.

Key Takeaways:

• Mining companies are pivoting towards AI, with Cango selling $305 million in BTC to fund this shift.
• Despite market volatility, some miners remain profitable and are not showing signs of capitulation.
• The overall sentiment in the crypto market may lead traders to consider mining companies as growth sources.

Cango Sells Over Half of Its BTC Holdings

Cango, a Bitcoin miner, sold 4,451 BTC for approximately $305 million during the market downturn, aiming to reduce debt and prepare for a strategic shift towards AI computing infrastructure. The average sale price was around $68,524 per coin, reflecting the company's response to current market conditions.

The company plans to deploy modular GPU units at over 40 global locations to provide on-demand AI inference capabilities to small and medium-sized enterprises. Cango's stock has seen an 83% decline year-over-year, but the company still holds 3,645 BTC valued at over $250 million.

Analysts have warned of execution risks associated with the industry's shift towards AI workloads, leading to downgrades for several companies, including Bitfarms and Bitdeer.

Key Takeaways:

• Cango sold 4,451 BTC for $305 million to reduce debt and pivot towards AI infrastructure.
• The company plans to deploy GPU units globally to serve AI needs.
• Analysts caution about execution risks in the transition to AI-focused business models.

Sources:

• Schwächere Bitcoin-Mining-Nachfrage: Rosenblatt senkt Kursziel für Canaan
• Größte Abwärtskorrektur seit Jahren: Difficulty des Bitcoin-Netzwerks fällt um mehr als 11 %
• Bitcoin Miner NFN8 meldet Insolvenz an, nachdem ein Brand die finanziellen Probleme verschärft hat
• Morgan Stanley unterstützt Cipher (CIFR) und TeraWulf (WULF), zeigt jedoch Zurückhaltung gegenüber Marathon (MARA)
• Können Mining-Unternehmen die Attraktivität von Kryptowährungen retten?
• Cango (CANG) Aktiennachrichten: BTC-Miner verkaufte mehr als die Hälfte seiner Bestände