Bitcoin miners can boost their profits and fix poor balance sheets by using some of their energy resources for AI and high-performance computing, according to VanEck.
Bitcoin miners could earn an extra $13.9 billion annually by 2027 if they start using some of their energy to support the AI and high-performance computing (HPC) sectors, according to investment firm VanEck.
VanEck, in its August 16 report, highlighted that AI companies need energy, and Bitcoin miners have it. With Bitcoin miners facing challenges from unpredictable operating costs and Bitcoin’s price fluctuations, VanEck suggests that redirecting some of their energy toward the growing AI and high-performance computing (HPC) sectors could strengthen their financial positions.
According to VanEck, Bitcoin miners often struggle with poor balance sheets due to issues like excessive debt, too much share issuance, or high executive compensation. The firm estimates that if publicly traded Bitcoin mining companies allocate 20% of their energy to AI and HPC by 2027, they could see an additional $13.9 billion in yearly profits on average over the next 13 years.
Investment firm Kerrisdale Capital recently criticized the Bitcoin mining industry, labeling it an “industry of snake oil salesmen” and arguing that current business models are unsustainable and deliberately dilute value. Kerrisdale’s chief investment officer, Sahm Adrangi, explained that these companies often issue shares to invest in the business, but fail to generate returns.
In contrast, VanEck pointed out that Bitcoin miners could benefit from partnerships with AI companies, which are typically willing to fund capital expenditures. 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 by providing 200 MW of infrastructure.
Similarly, Canadian miner Hive Digital Technologies is expanding its facilities to offer high-performance computing (HPC) services to industries like gaming, AI, and graphics rendering, as noted in 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.
On August 2, Cointelegraph reported that Marathon Digital, a U.S.-listed Bitcoin miner, posted $145.1 million in revenue for the second quarter—about 9% less than the $157.9 million analysts had expected.
Before the halving, on April 8, CryptoQuant CEO Ki Young Ju predicted that the cost of mining with Antminer S19 XPs would double from $40,000 to $80,000 after the halving. As of now, Bitcoin is trading at $59,550, according to CoinMarketCap.
