Canaan exec says opportunity outweighs crisis as Bitcoin miners struggle with shrinking profits

2022 has been an exceptionally rough year for the crypto market, and the last few months of Bitcoin’s (BTC) price action could be a sign that bears aren’t even close to being ready to let up. Crumbling crypto prices also equate to diminishing profits for Bitcoin miners and this week’s regulatory action by the United States lawmakers requesting energy consumption data from four major BTC mining companies is bound to exert a bit more pressure on an already fragile situation.

Despite the increasingly bearish climate, most of the Bitcoin miners Cointelegraph has spoken to are incredibly optimistic about Bitcoin’s short and long-term price prospects.

Chiming in with similar sentiments, Canaan senior vice president Edward Lu spoke with Cointelegraph head of markets Ray Salmond about how industrial Bitcoin miners have matured and the new synergies they have created with the oil and gas and big energy sector in the United States and the Middle East.

Ray Salmond: Edward, what’s happening in the mining industry right now, from your point of view?

Edward Lu: Wow. This is a really big question. A lot of things are happening in this industry, especially in recent months. If you’re looking at Bitcoin dropping a little bit and coming back to stabilize in terms of days, it looks like the cycle is shorter than what we expect. I think by the end of the year, the price will be a bit better, going up a little bit. In the mining industry, you can see a lot of activities happening.

I remember that before last year, China and the U.S. market were the two major markets for mining, a mining’s generating hash rates, and then the Chinese miners moved out of the country to Kazakhstan in the first phase. And then starting from the beginning of this year, we see a lot of movements toward the U.S. market, and obviously, we see a lot of activities happening where you are in the state of Texas.

The availability of cheaper electricity, comparatively speaking, and also friendly policies and as well as engineers. There are decent, well-trained engineers in those industries. So really, a lot of things are happening in the mining industries.

RS: Electricity prices are soaring in the European Union and the United States, and at the same time, Bitcoin continues to trade near its 2018 all-time high. ASIC prices are also down roughly 70%, and it appears that for some miners, the cost of mining outweighs profitability. What are some of the capital expenditures (CAPEX) and operational…