Observation from the International Mining Summit: Entering China has become a consensus among overseas mining giants

On October 12, the Global Mining Leaders Summit hosted by overseas mining media MinerUpdate was successfully held in Chengdu. This conference not only invited domestic mining giants such as Canaan Creative, Innosilicon, and BTC.com Mining Pool, but also mining pools, mines, and research institutions from all over the world. Babbitt was invited to attend the conference and interviewed Genesis Mining CEO Marco Streng, Luxor Mining CFO Ethan Vera and many other overseas guests on site to take you to understand China in the eyes of foreign mining bosses and their judgment on the market.

Overseas companies look at the Chinese market: expecting clear and friendly regulation

Luxor Minig is a North American mining company. It seized the opportunity that large mining pools have not yet entered the mining of many popular competing coins, and decisively cut into PoW coins such as Grin and Siacoin. It only announced the addition of Bitcoin mining business this year. Luxor Technologies CFO Ethan Vera said in an interview with Babbitt that he is familiar with the Canadian market, "It's my home turf."

"In Canada, the mining industry is more transparent because many companies are listed companies, such as Bitfarm. Every quarter, listed companies hold investor meetings to answer various questions from investors about their business. The United States is similar. So, in North America, you can get more transparency and more in-depth analysis. In China, we may rely more on personal connections."

Founded in 2017, MineBest is a Polish mining farm construction and mining service company with a team of nearly 200 people. CEO Eyal Avramovich told Babbitt that China impressed him as "fast" in terms of investment, but in the long run, the profits that can be obtained will be less because China's electricity prices are more expensive. "Many of our mines are in Central Asia, where electricity prices are much cheaper than in China." At the same time, he is also very concerned about regulatory issues.

“China currently has no clear regulations, but many countries have introduced regulations, and some mining-friendly countries even have tax exemption policies. With clear regulations, we will feel safer.”

On the right is MineBest CEO Eyal Avramovich

Genesis Mining is one of the world's largest cloud computing providers. CEO Marco Streng proudly told 8btc that the company has served more than 2.8 million users. He said that in terms of cost and expense, China's capital expenditure (expenditure on acquiring fixed assets) is lower, and other countries' operating costs (labor, electricity costs, etc.) are lower. "Outside of China, renewable energy is widely used, such as geothermal and wind power generation, especially in Europe."

“In terms of regulation, European regulators are very friendly. In the United States, the risk of mining is relatively low. In China, it seems that there are always various news and speculations in the market. I really hope that there will be no problems with regulation.”

Mining research: Chinese institutions are slightly weak

There are also certain differences between China and foreign countries in the research and analysis of mining. At MinerSummit 2019, Apolline Blandin, head of blockchain research at CCAF of Cambridge University, and Amanda Fabiano, senior project manager of Fidelity (FCAT), both shared their research on mining power consumption. John Lee Quigley, head of research at MinerUpdate, also compared the cost-effectiveness of several existing mining machines, and Matt D'Souza, CEO of Blockware Solutions, analyzed mining machines and the market from the perspective of the relationship between "mining machine prices and Bitcoin prices." It can be seen that whether it is an independent cryptographic research institution, a university research department, or a research team under a financial company, overseas research on mining is still quite enthusiastic.

In China, Qin Shize, senior analyst at TokenInsight, told Babbitt that although mining pools and mines themselves conduct research and analysis on industry data, there are only a handful of independent research institutions in China, "including TokenInsight, there are probably only 3-4." Compared with the situation where Chinese and foreign companies each occupy half of the mining pool round table, TokenInsight is a bit of a "debate with scholars" at the research institution round table.

John Lee Quigley, Director of Research at MinerUpdate

The market is down, miners are recharging their faith for you

In the second half of this year, the crypto market has been cooling down, especially after the September crash, many investors have a feeling that the bull market has gone and the bear market has come. As miners, are they still as confident as before?

Luxor Technologies CFO Ethan Vera believes that Bitcoin will be halved next year and the macroeconomic trend is also good, so he is optimistic about the market. "In the next few months, even if it doesn't rise, it will at least remain relatively stable. We are not worried about the coming of a big bear market."

Genesis Mining CEO Marco Streng was very calm, thinking that this was just a normal cycle. He also did not forget to promote the advantages of mining compared to buying Bitcoin directly: "If you buy cryptocurrency directly and the price drops, you will lose money. But if you mine, mining can allow you to make continuous profits."

However, Marco is not averse to the bear market, but rather thinks it is a good thing.

“A bear market is a good thing. It can eliminate inefficient miners and make mining more competitive. For the mining industry, a bear market is a very interesting and important issue, which will involve the expansion of many companies’ businesses.”

On the right is Genesis Mining CEO Marco Streng

Similarly, research institutions are not worried about the current downturn. Blockware Solutions CEO Matt D'Souza predicts that we are in the first third of the bull market, and there is a 50% probability that the peak of this bull market will fall in the range of $60,000 to $90,000. There is also a probability that the price of the currency will return to zero (this probability is decreasing), such as encountering a large-scale hacker incident, or a strong policy shutting down transactions and killing liquidity.

Compared to the positive and optimistic attitude of most miners, MiniBest CEO Eyal Avramovich poured cold water on the market. He said that the market has not turned from bull to bear, and the reality is that the last bear market has not ended. However, he still recognizes the positive effect of next year's halving on the market.

The consensus of overseas mining companies: Entering China

The scale and market of China's mining industry are undoubtedly the largest in the world. Although there are obvious differences between the mining industry in the East and the West, and regulatory risks are worrying, overseas mining companies still love China deeply, and entering China is the consensus of many companies. Luxor Technologies CFO Ethan Vera said that the company has established a BD team specifically for the Chinese market. He currently lives in Hong Kong and often travels to Shenzhen and Shanghai. He is very eager to cooperate with Chinese miners. MiniBest CEO Eyal Avramovich said that they have set up an office in Shenzhen, "more than 400 square meters." There are currently 5 employees, "We expect to increase to 40, plus the mines in China, there will be more than 50 people in China in the future." Bitfury, a full-service mining service provider, has also entered China and set up an office in Shanghai.

When asked about the plan for China, Genesis Mining CEO Marco Streng first praised China: "I like China, China is a super great country." He revealed that the company now has many Chinese users who are buying cloud computing power, and they are all asking when Genesis Mining will enter the Chinese market. Therefore, the company is now preparing to enter the Chinese market. It is worth looking forward to that Marco Streng will come to China again in November to attend the 2019 World Blockchain Conference Wuzhen hosted by Babbitt.