Bitcoin miners could potentially generate an additional $13.9 billion in annual revenue by 2027 if they partially transition to supplying energy for the artificial intelligence (AI) and high-performance computing (HPC) sectors, according to a report from investment firm VanEck.
“AI companies need energy and Bitcoin miners have it,” VanEck stated in their August 16 report. The firm suggests that Bitcoin miners, who face profitability challenges due to fluctuating operating costs and Bitcoin price volatility, may improve their financial health by redirecting some of their energy capacity towards the rapidly growing AI and HPC sectors.
VanEck highlighted that many Bitcoin miners struggle with poor balance sheets, burdened by excessive debt, share dilution, or high executive compensation. They estimate that if publicly traded Bitcoin mining companies allocate 20% of their energy capacity to AI and HPC by 2027, it could result in over $13.9 billion in additional yearly profits on average over a 13-year period.
This insight follows criticism from investment firm Kerrisdale Capital, which recently labeled the Bitcoin mining industry as unsustainable, claiming that many firms in the sector are not viable businesses and are engaging in deliberate dilution by issuing shares without delivering returns.
Read more: Analyst Skeptical of Bitcoin Dominance Reaching 70% Again
Despite these challenges, some Bitcoin miners have already begun to explore opportunities in the AI and HPC space. For instance, Core Scientific, the fourth-largest Bitcoin miner by hash rate, secured a 12-year contract with AI hyperscaler CoreWeave, which is 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 provide HPC services to companies in the gaming, AI, and graphics rendering industries, according to its Q4 2023 report.
VanEck’s report comes during a tough year for Bitcoin miners, especially after the April Bitcoin halving, which reduced mining rewards from 6.25 BTC to 3.125 BTC per block.
In August, Cointelegraph reported that Marathon Digital, a U.S.-listed Bitcoin miner, posted second-quarter revenue of $145.1 million, falling short of analysts’ expectations of $157.9 million.
Additionally, CryptoQuant CEO Ki Young Ju noted that the cost of mining using Antminer S19 XPs is expected to double from $40,000 to $80,000 after the Bitcoin halving in mid-April 2024. Currently, Bitcoin is trading at $59,550, according to CoinMarketCap data.
Cre: cointelegraph.
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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