Canaan Inc. ($CAN) shares plunged 16% in heavy pre-market trading after the company revealed weaker-than-expected earnings, catching investors off guard. The Canaan stock drop October 2025 is particularly striking as bitcoin prices recover globally, prompting questions about sector resilience. What’s driving this sharp decline in one of China’s top mining hardware makers?
Canaan Shares Fall 16% on Missed Revenue and Margin Pressure
On October 29, Canaan Inc. ($CAN) disclosed third-quarter 2025 revenue of $50.8 million, down 32% year-over-year and below analyst consensus of $61 million, according to Refinitiv data. Net loss widened to $23.2 million versus $16.4 million a year prior, as gross margins shrank to 14.7% from 27.1% in Q3 2024. Trading volume surged to 19.5 million shares—triple its 30-day average—after the company cited lagging mining rig demand and rising production costs in its quarterly filing. Bloomberg reported the drop marked Canaan’s sharpest one-day decline since February 2022.
Bitcoin Mining Stocks Underperform Amid Crypto Volatility
The slump in Canaan’s share price reflects broader pressures on bitcoin mining stocks, even as bitcoin itself neared $39,000, up 8% month-to-date according to CoinDesk. Mining hardware makers have struggled to maintain margins as the network hash rate—an indicator of mining activity—hit new highs in October 2025, driving competition and squeezing profits. Sector ETFs like the Valkyrie Bitcoin Miners ETF (WGMI) slipped 5% in tandem with Canaan’s announcement. The industry faces headwinds due to rising electricity costs and looming regulatory scrutiny, presenting ongoing volatility for investors focused on crypto-exposed equities. For more coverage, see cryptocurrency market trends.
How Investors Should Navigate Bitcoin Mining Exposure Now
Investors holding Canaan ($CAN) or peer mining stocks face complex choices. Those with short-term exposure may consider limiting risk, as hardware surplus and falling unit prices are likely to persist. Long-term investors could look for opportunities if bitcoin’s next halving event in 2026 spurs renewed hardware demand. Meanwhile, ETF holders in funds such as WGMI or Bitwise Crypto Industry Innovators (BITQ) may see increased volatility and should monitor fund composition closely. Sector watchers should follow stock market analysis and latest financial news as upcoming U.S. energy policy decisions and Asian supply chain dynamics remain potential catalysts.
What Analysts Expect Next for Bitcoin Mining Stocks
Industry analysts observe that sustained high bitcoin prices could gradually shore up demand for next-generation mining rigs, but manufacturer margins remain under pressure from global overcapacity. Morgan Stanley’s September 2025 sector update noted that production cost inflation and a crowded marketplace may keep downward pressure on hardware pricing through mid-2026. Market consensus suggests a selective, quality-focused approach will define outperformance as the sector reacclimates to changing crypto economics.
Canaan Stock Drop October 2025 Signals Caution for Crypto Investors
The Canaan stock drop October 2025 highlights deepening fragility within bitcoin mining supply chains, even as headline crypto prices rebound. Investors should watch for hardware order momentum and upcoming earnings from key peers in the months ahead. Staying informed on evolving cryptocurrency market trends is essential, as sector volatility offers both risks and windows of opportunity in this rapidly shifting ecosystem.
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