Miners may never get to wait for the next bull market again

Preface

As the demand for artificial intelligence (AI) and high-performance computing (HPC) power rapidly grows, more publicly listed Bitcoin mining companies are exploring shifting data centers, electricity, and infrastructure toward AI computing. This trend has also raised a question in the market: Is AI changing or even reshaping the future of the Bitcoin mining industry?

In an interview aired on the Blockspace Podcast on March 10, Liang Wang, Vice President of the leading global Bitcoin mining hardware manufacturer Canaan, shared his observations on this issue. He believes that Bitcoin as an asset is still very likely to experience new bull markets, but that doesn’t necessarily mean the Bitcoin mining industry itself will see the same prosperity as in the past. The more important reason is not AI or HPC, but that the economics of mining are gradually worsening over time.

Below is a summary compiled by the Bitpush team based on the interview, with slight edits to preserve the original meaning and facilitate reader understanding.

“Bitcoin Will Have Bull Markets, but I Really Don’t Know if Mining Will”

Host:
Many listed mining companies are now shifting their hash power resources toward AI. How do you view this change? Will AI change or even replace the Bitcoin mining industry?

Liang Wang:
I’ve been thinking about this question a lot. First, I believe we must embrace AI and AI HPC because this is a huge change that will alter our way of life and many job structures. Many jobs will be replaced by AI, and I think that’s very clear.

But if the question is whether AI will replace the entire Bitcoin mining industry, I personally don’t think so. Bitcoin as an asset class still holds value, and it has its own cycles. So if you ask me whether Bitcoin will have another bull market in the future, I believe the answer is yes.

But if you ask another question: will the Bitcoin mining industry still have a bull market? Frankly, I don’t know the answer.

Because what’s drawing attention away from this industry now isn’t just AI HPC. The more important reason is that the economics of mining itself are gradually deteriorating over time.

“Entering the mining industry now is much more difficult than five years ago”

Host:
Why do you think the economics of mining are worsening?

Liang Wang:

Because today’s industry is completely different from five years ago. Five years ago, if you could get a mining machine, you were likely to make a lot of money. Many people in the industry back then really saw mining as a “money-printing machine.” But that’s no longer the case. Now, entering this industry has become very challenging.

Look at the current Bitcoin price—around $65,000 to $70,000—but the total network hash rate hasn’t dropped significantly, right? That alone indicates a problem. Logically, if the industry was truly that profitable, or conversely, if AI had completely replaced mining, we should see more obvious changes in hash rate. But that’s not the case. The reality is, people still keep their machines running.

Why? First, because they need income. Even if they’re no longer profitable, as companies they still need revenue, need to keep operations going, and need to keep employees working. Second, Bitcoin mining now plays an increasingly important role as a grid regulator. HPC runs 24/7 continuously—you can’t just turn it off easily. So the grid needs flexible loads like Bitcoin miners that can be turned on and off to absorb peak and off-peak power, helping expand the entire power system. So many companies, even with thin or no profit, won’t easily shut down their hash rate.

That’s why I say, the issue isn’t just AI taking the spotlight from mining. The real challenge is that new miners are finding it increasingly difficult to make money in this industry.

After 2028, monetary rewards may no longer be the industry’s main driver

Host:
What do you think the industry will look like in the next two or three years, or even after 2028?

Liang Wang:
Bitcoin has a well-known mechanism—halving every four years. What does halving mean? It means that if Bitcoin’s price doesn’t double, the economic rewards from block subsidies are decreasing.

Everyone knows there will be another halving in 2028. The question is: if by then Bitcoin’s price hasn’t risen to $300,000, or to a level that sufficiently supports miners’ earnings, what will drive this industry forward? That’s what I’ve been pondering.

My view is that Bitcoin mining will continue to exist and remain part of the energy landscape, but I don’t think that after 2028, monetary rewards will be the core driver of this industry anymore. I believe the industry will continue to exist around a few directions, such as grid balancing, heat reuse, household applications, or utilizing resources that traditional energy systems can’t efficiently use. But if you ask me whether there will still be a boom cycle where everyone rushes in and miners make big profits, I really can’t say.

Of course, I hope I’m wrong. I hope Bitcoin rises to $500,000 per coin, and everyone rushes back into the industry. But no one can truly predict that, and I don’t have a crystal ball myself.

AI and mining are not zero-sum

Host:
A popular view now is that AI will directly compete for Bitcoin mining’s electricity resources. Do you agree?

Liang Wang:
I don’t think this should be viewed as a zero-sum game. Because AI HPC and Bitcoin miners are fundamentally different loads. AI HPC must run continuously, 24/7, often cannot be turned off. But Bitcoin miners are different—their biggest advantage is that they can be turned off when needed and quickly restarted when electricity is abundant.

That’s why I’ve always believed that in places like Texas, Bitcoin miners are welcomed by grid operators and energy providers. Because they help absorb grid imbalances. When needed, they can release electricity; when there’s excess, they can “consume” it. Battery storage is also a solution, but from a cost perspective, it’s much more expensive than Bitcoin mining. So I’ve been optimistic about the role of Bitcoin miners in energy systems. I think they’re not only not replaced by AI but may become even more important in the AI era, in a different way.

Therefore, I see AI and Bitcoin mining as often capable of coexisting and even complementing each other, rather than one displacing the other.

North America remains a market with long-term predictability

Host:
From a regional perspective, where do you think the most potential for mining growth lies in the future?

Liang Wang:
We’ve looked at many places and tried many things. For example, we have experience in Kazakhstan. But the problem is, many countries initially welcome miners because they help utilize idle electricity. However, once local electricity becomes tight or political environments change, mining quickly shifts from “welcome” to “targeted.”

That’s why we prefer North America, especially the US and Canada. Not that there are no issues here, but overall, the predictability is better. In the US, at least you know the rules, understand the differences between states, and if you bring jobs, taxes, or help the grid, local authorities are more likely to understand and support you. In many other countries, uncertainty is too high—sometimes just a policy change or a shift in attitude from a local power figure can wipe out your entire business.

For a publicly listed company, long-term predictability is crucial. You can’t gamble with shareholders’ money on a market that might not even exist in ten years.

“The situation in China is very complicated”

Host:
There’s been a lot of concern about China’s mining situation. What’s your view on the current status of surplus mining farms in China?

Liang Wang:
China’s situation has always been complex, and I don’t think it’s a simple, top-down coordinated process. China is huge, with different considerations at various levels and regions. At the national level, the focus is on financial stability, especially preventing capital outflows through mining or Bitcoin trading. That’s been a key background. So after 2021, Bitcoin mining and crypto trading were officially banned in China, and that hasn’t changed.

But on the local level, there are different realities. For some regions, Bitcoin mining was helpful—it created jobs, taxes, and helped absorb surplus electricity, especially during economic downturns. Many localities viewed miners as a way to monetize their power infrastructure. That’s why you still see some activity today—there’s market demand.

However, I want to emphasize that we’ve never viewed this as China re-welcoming Bitcoin mining. We don’t see it that way. We also don’t think it’s wise to base long-term capital allocation on the hope that China might change its policies. That’s why we’ve always focused on North America rather than betting on some new Chinese crypto strategy.

Will AI take away mining capacity?

Host:
There’s also concern that with the surge in AI chip demand, mining hardware manufacturers will find it harder to secure chip capacity.

Liang Wang:
I don’t think capacity will be completely taken over by AI. In the short term, chip supply will be tight at times, but over five to ten years, I believe supply and demand will balance out.

Companies like TSMC and Samsung are making long-term investments worth billions or even hundreds of billions of dollars. They look at the next decade, not just the next year or two. Mining chips are part of their business, but not the whole thing, nor necessarily the most critical part.

What’s more important is whether you have a long-term partnership with the foundries, whether you have successful wafer production experience, and whether you can produce competitive products with a given process node. Each new generation of process technology involves huge R&D costs and high trial-and-error costs. New entrants without these capabilities will find it very difficult to break in, even with money.

This industry isn’t about “I want to make the most advanced chips,” but about whether you can produce them and whether there’s demand. So I see this more as a long-term technical cooperation issue rather than simply AI “stealing” capacity from miners.