Bitcoin miners are looking for new strategies after the April 'halving' that cut their revenues. One promising opportunity is the use of mining equipment for artificial intelligence (AI) applications.
Halving Mining Revenues
The April event reduced mining rewards from 6.25 BTC to 3.125 BTC per block. As a result, miners produced 28% fewer BTC on average in the second quarter of 2024, according to an August research note by JP Morgan. Gross profits tumbled to 44% from 58% the previous quarter, even as miners poured approximately $1.2 billion into mining infrastructure.
Simple Synergies with AI
Demand for computational power from AI is surging, providing Bitcoin miners with a new opportunity. According to a VanEck report on August 16, AI companies need energy, and Bitcoin miners have it. Some miners can repurpose their equipment to serve AI in less than a year. Nick Hansen, CEO of Luxor, said that miners could earn $2 to $3 from AI per kilowatt hour, compared to $0.15 to $0.20 from BTC mining.
Leading the Pack in New Directions
Some miners have already taken action in new directions. Core Scientific has secured contracts to provide 200 mW of energy to AI company CoreWeave. Hive Digital Technologies has been pivoting to AI since 2023 and has reported $2.6 million in revenue from its HPC business. Hut 8 secured $150 million from investment firm Coatue to invest in servicing AI, and plans to double its power capacity.
Bitcoin mining is about more than just BTC; it's about infrastructure, which is always in demand. Miners who understand this will be in a strong position.
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