Cheng Fend, the sales director at cryptocurrency mining giant Canaan, has recently revealed the firm would be able to survive a bear market in the crypto and that for most crpyot mining machine manufacturers, surviving is “good enough.”.
During an interview with ChainDD, which recently released its market insight-focused cryptocurrency wallet, Feng noted that the company stored up on ‘ammunition’ to be resilient for a market downturn. He was quoted as saying:
A couple of years ago, we stored up enough 'ammunition' so the company is resilient now. If the bear market goes on for three years, it is not a problem. After all, the cost is quite low and we are also doing business in the field of AI chips and other investments.
When asked about the mining firm’s move into the field of acritical intelligence (AI), Feng revealed Canaan and other cryptocurrency mining firm have to enter the AI industry as it’s less prone to market fluctuations. Per his words, Canaan is “only involved in a small section of AI” and will use it to start entering the AI chip business.
Feng added that in the next “one or two years, it is possible to generate 30% of the total operating revenue from AI chips.” In 2017, Canaan’s net profit was of $53.1 million, while last year it was between $103 million and $118 million.
Because of the crypto ecosystem’s bear market, which saw BTC, the flagship cryptocurrency, drop from its near $20,000 all-time high to a low of about $3,200, Canaan missed its $1.47 billion sales target, even though it hit half of that in 2018’s first six months.
So it is really impossible to predict the “bear market”. Right now, for most miner manufacturers, survival is good enough.
Coping With The Bear Market
The bear market, as CryptoGlobe covered, saw cryptocurrency prices drop so much that cryptocurrency miners were barely able to stay afloat. In November, BTC’s hashrate plummeted because of this, but as prices started recovering bitcoin’s difficulty adjusted upwards, breaking a months-long trend.
To survive, Feng claimed Canaan reduced its expenses by optimizing the work each of its 400 employees did, while ‘increasing its income’ by selling its mining machine stock, including that of its AvalonMiner A911, for cash to sit on until the market improves.
If the bear market goes on for three years, it is not a problem. After all, the cost is quite low and we are also doing business in the field of AI chips and other investments.
Although Canaan is reportedly looking to enter the AI chip sector, its sales director noted that it may not be able to compete with some of that market’s big names. Fir cryptocurrency miner manufacturers, however, the ‘AI path’ is inevitable as the crypto market is too volatile