20% shift to AI and HPC could make Bitcoin miners $13.9 billion a year: VanEck
Bitcoin miners have the potential to generate an additional $13.9 billion in annual revenue by 2027 if they move to power the artificial intelligence and high-performance computing (HPC) sectors.
“AI companies need power, and Bitcoin miners have it,” VanEck said in an August 16 report. The company believes that Bitcoin miners, who face profitability risks from fluctuating operating costs and Bitcoin (BTC) price fluctuations, may find it beneficial for their financial position to shift some of their energy capacity to the growing AI and HPC sectors.
“Bitcoin miners generally have a bad balance of having too much debt, issuing too much stock, too much executive compensation, or a combination of all three,” VanEyck said.
Van Eyck estimates that if publicly traded Bitcoin mining companies shift 20% of their power capacity to AI and HPC by 2027, “total incremental annual profits could exceed an average of $13.9 billion per year over 13 years.”
The comments follow recent claims by investment firm Kerisdale Capital that it referred to the BTC mining industry as a “snake oil salesmen's industry”. The company says that they are not viable business models in their current form and as a result it is being deliberately scaled back.
“They prepare shares, they invest those shares into the business. But there are no returns,” Sahm Adrangi, Chief Investment Officer of Currisdale Capital, recently told Cointelegraph.
Meanwhile, VanEck said the benefit of Bitcoin miners entering into such contracts is that AI companies are willing to provide the financial resources needed for capital expenditures.
Core Scientific, the fourth largest bitcoin miner by hash rate, recently entered into a 12-year contract with AI hyperscaler CoreWeave. This deal is expected to provide 200 MW of infrastructure and generate more than $3.5 billion in revenue.
Meanwhile, Canadian miner Hive Digital Technologies continues to expand its facilities to provide HPC services to companies in the gaming, artificial intelligence and graphics rendering industries, it said in its Q4 2023 report.
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VanEck's report comes in what has been a challenging year for Bitcoin miners following the April Bitcoin Halving, which cut mining rewards from 6.25 BTC to 3.125 BTC to increase block on the blockchain.
In the year On August 2, Cointelegraph reported that US-listed Bitcoin miner Marathon Digital reported revenue of $145.1 million in the second quarter, roughly 9% less than analysts' estimate of $157.9 million.
On April 8, before the Bitcoin halving, CryptoQuant CEO Ki Young Juthe said the cost of mining using the current Antminer S19 XPs would rise from $40,000 to $80,000 after Bitcoin halved in mid-April. According to CoinMarketCap data, at the time of publication, Bitcoin is trading at $59,550.
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