Welcome back! This is Canaan's weekly newsletter on Bitcoin mining, energy, and compute infrastructure.
 

Bitcoin's last three cycle lows landed in January 2015, December 2018, and November 2022. Four years apart, near enough to call it a pattern. Based on that arithmetic, the next one belongs somewhere in late 2026, which could explain the low bitcoin price printed in mid-August.

Interestingly, the mining data might give us an even more accurate picture.
 

Hashprice reached roughly $28 to $30 per PH per day earlier this year, a post-halving low. In February, bitcoin traded below the network's average production cost for the first time since November 2022. Difficulty then did something it has done only once before in bitcoin's history: it fell year over year. The only prior instance was 2021, when China banned mining. Two double-digit downward adjustments landed in the first half of the year, 11.16% in February and 10.09% in June.

In the months that followed, public miners cut their bitcoin treasuries by more than 15,000 BTC from the peak. Charles Edwards' Hash Ribbons registered one of the longest capitulations on record.

https://x.com/caprioleio/status/2008134382226493888

The argument many are making is that miner capitulation is part of how the bottom forms. Marginal machines come off the network, difficulty falls, and the survivors' economics improve even if the price does not move.
 

At those hashprice levels, the gap between a 30 J/TH fleet from 2022 and something like Canaan's A16 series at 12.8 J/TH makes all the difference. Historically, network-wide efficiency improves the most when revenue is worst.
 

Then, last month, bitcoin did something. After spending months in the low-60s, it broke out on roughly $3 billion of short liquidations, and held the move on eight consecutive days of spot ETF inflows worth more than $2.8 billion, the strongest month of the year. Fidelity's Jurrien Timmer said that a decisive break above $80,000 would confirm a double bottom, with bitcoin sitting at the lower bound of its power-law corridor.

https://x.com/TimmerFidelity/status/2093384867228819795

Others, however, don’t think the 4-year cycle is still in play.
 

Matt Hougan at Bitwise published a memo in December titled "The Four-Year Cycle Is Dead", arguing that each halving matters half as much as the previous one, that the rate cycle is now a tailwind rather than a headwind, and that institutional flows have replaced the speculative buying that drove the old rhythm. Grayscale and ARK have made versions of the same case.
 

Numbers don’t lie. The question is about whether they still mean what they used to.

In the News

• Nscale Secures $3 Billion Debt Package for US AI Data Centers

• Nvidia Backs MediaTek With $3.5B in Expanded AI Chip Pact

• Swedish Tax Scrutiny Shadows Crypto Miners' Pivot to AI Compute

• Core Scientific Adds $600M Credit Facilities as AI Buildout Accelerates

• Bitcoin Mining Writedowns Drive IREN's $684 Million Quarterly Loss

• Bitcoin ETF Inflows Hit Eight Straight Days as August Tops $3 Billion

Network at a Glance

• BTC price (USD): ~$77,185

• Network hashrate: 926.7 EH/s

• Difficulty: 125.8T

• Hashprice: ~$38.71 / PH / day

Project Spotlight

The AvalonMiner A1346 shipped at 110 TH/s and 3,300W, an efficiency of 30 J/TH, on a new chassis design that broke from the A12 layout. The A1366 followed at 130 TH/s. By the standards of the day, it was a very competitive device.

It arrived weeks before FTX collapsed and hashprice fell to what was then an all-time low near $55 per PH per day. In the following years, the operators who bought A13s, acquired hashrate at the cheapest dollar-per-terahash in years and ran it straight through the recovery that followed.

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Disclaimer: This newsletter shares industry commentary and third-party news for informational purposes only. The views and opinions expressed by third-party sources are those of their respective authors and do not necessarily reflect the views of Canaan Inc.  For official news, please refer to Canaan’s press releases and SEC filings at https://investor.canaan-creative.com/.