An Interesting Conversation Between Canaan’s Edward Lu and Cointelegraph’s Ray Salmond

To say 2022 has been a wild year in the cryptoverse would be an understatement. Not only has the most valuable cryptocurrency, Bitcoin, plummeted from $47.7k at the beginning of the year to a low of $17.6k by June (then began a remarkable rebound to $25k; then slipped to $21k), but the stock prices of major Bitcoin mining companies have been on a wild ride as well.

Riot Blockchain (RIOT) has traded everywhere between $24 and $4. Hive Blockchain (HIVE) has swung from about $14 a share to under $3 a share. And not to be outdone, Marathon Digital (MARA) has traded between $34 and $5 this year. These swings have affected some of their market capitalizations by over 6x.

All three of these stocks are trading well off their 52-week lows, as of this writing, however.

But even in this wild market, most Bitcoin miners and Bitcoin mining companies remain very bullish on Bitcoin’s long-term price. Of course, miners are not alone. Many crypto pundits and experts have predicted BTC trading up to $1M or more in the coming years. While long-term outlook may indeed be quite bullish, many BTC investors and investors in Bitcoin miners want to know what’s happening now, today. And when will crypto winter officially be over?

Well, the senior vice president of Canaan Inc. (CAN), Edward Lu, was interviewed by Cointelegraph’s Ray Salmond this week and offered some insights.

Here are some abridged highlights of the conversation (you can read the entire interview here).

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.

Ray Salmond: The next Bitcoin halving is in about 590 days. What impact does this have on the efficiency of ASICs in the range of 110 TH/s to 140 TH/s? Can you speak about the reward for mining becoming smaller, yet the energy required to produce 1 BTC being higher? How could this dynamic change as production costs rise?

Edward Lu: The machines will keep improving. We’ll be more efficient when the technology develops. Of course, Bitcoin has been designed in a way that every four years, that reward is halved so that it becomes less and less. But it doesn’t mean that your profit will become less and less. If you look at the history, each halving happened every four years, and the business is still growing healthily. Mining industries keep growing. The profit depends, as I said earlier, on a lot of things. Of course, your machine costs, your infrastructure cost, your OPEX, CAPEX and also your energy costs. And of course, the last thing, which is pretty important, is the Bitcoin price. So, there are many things together. I don’t see this trend becoming smaller and smaller. I think this industry will still keep on going as well as we have gone through in the past. It’s a healthy, profitable business for mining industries.

Ray Salmond: There’s growing synergy between traditional big energy and Bitcoin mining, such as capturing flared gas to power generators, solar mining and even hydroelectric-powered mining…

Edward Lu: … As you mentioned, those energy companies step in because of the ability to use wasted energy and surplus daytime and nighttime energy. And this helps them to use these wasted energies and convert them into a storable value. For me, Bitcoin is a value that you can store. When you are wasting those energies, they cannot be stored in a storable way.

Ray Salmond: Is there anything that you want to say to the world? Do you have any personal thoughts you’d like to share?

Edward Lu: I think anybody in this industry knows that Bitcoin has a cycle, right? Sometimes the cycle lasts two to three years, sometimes three to six months, or sometimes longer. This time, I believe it will be shorter. Of course, nobody can predict it, but I have more confidence that by the end of the year, the price will be going up slowly. And in the long term, I strongly believe that Bitcoin will have much better growth in terms of price…

I do believe this moment is more opportunity than crisis. More opportunities for miners, miner manufacturers, infrastructure builders, energy builders and even traditional financial investors. For me, I look at this time as a time for more opportunities.

Read the full Cointelegraph interview with Edward Lu, HERE