Bitcoin miners stand to gain approximately $13.9 billion in additional annual revenue if they redirect 20% of their energy capacity to the artificial intelligence (AI) and high-performance computing (HPC) sectors by 2027, according to a recent report by investment firm VanEck.
The report, released on August 16, highlights the potential for Bitcoin miners to capitalize on the growing demand for energy from AI companies. "AI companies need energy, and Bitcoin miners have it," VanEck stated, suggesting that this shift could improve the financial stability of Bitcoin miners, who often struggle with volatile operating costs and fluctuations in Bitcoin’s value.
VanEck noted that many Bitcoin mining companies have faced challenges such as high levels of debt, excessive share issuance, and inflated executive compensation, all of which contribute to their weak financial positions. The firm estimates that by partially transitioning to AI and HPC, publicly traded Bitcoin miners could see total additional annual profits averaging $13.9 billion over the next 13 years.
Some Bitcoin mining companies have already begun integrating HPC capabilities into their operations. For example, Core Scientific, the fourth-largest Bitcoin miner by hash rate, recently secured a 12-year contract with AI hyperscaler CoreWeave, expected to generate over $3.5 billion in revenue by supplying 200 MW of infrastructure. Similarly, Canadian miner Hive Digital Technologies is expanding its facilities to offer HPC services to industries such as gaming, AI, and graphics rendering.
This report comes at a time when Bitcoin miners are facing a challenging market environment, exacerbated by the recent Bitcoin halving, which reduced mining rewards by half. The April halving has already led to a decrease in revenue for some miners, including Marathon Digital, which reported lower-than-expected earnings in the second quarter of 2024.
VanEck's insights offer a potential lifeline for the industry, suggesting that the growing AI and HPC sectors could provide a profitable alternative revenue stream for Bitcoin miners, helping them navigate the financial pressures of the volatile cryptocurrency market.
