AI-Focused Bitcoin Miners Outperform Traditional Rivals

Shares of bitcoin miners that also engage in artificial intelligence are outperforming those of competitors focused solely on cryptocurrency mining, according to analysts at Bernstein, reports The Block.

AI-oriented miners such as Core Scientific, IREN, and Terawulf have achieved greater success due to investor confidence in diversified business models, more predictable revenue streams, and enhanced flexibility.

Analysts noted that the hash rate growth of such miners may be slower than those focused exclusively on bitcoin. However, AI-focused companies are expanding data center infrastructure, opening up additional opportunities in the rapidly growing artificial intelligence sector.

Experts also observed differences in the behavior of different categories of mining players:

• large companies such as MARA (formerly Marathon Digital), Riot Platforms, and CleanSpark hold significant volumes of bitcoins on their balance sheets. They sold less compared to 2023 and retained 100% of what was mined in August. These firms are willing to raise external capital or dilute shares to expand their market share in mining;
• data center-oriented companies, on the other hand, do not hold bitcoins on their balance sheets. This is often due to internal policies or debt obligations. They sell 100% of their rewards to finance operations.

Bernstein noted that public miners engaged solely in cryptocurrency mining are likely to hit bottom around current price levels and will benefit from bitcoin’s rise once uncertainty surrounding the US elections dissipates.

Earlier, experts highlighted that miners are attractive partners for creating data centers for AI due to their access to power sources and operational capabilities.

Artificial intelligence offers 17-25 times more revenue per kWh spent compared to bitcoin mining — $0.17-0.2 versus $3-5.