Bitcoin miners could generate around $13.9 billion in additional revenue per year by 2027, if they partly transition to powering the artificial intelligence and high-performance computing (HPC) sectors, according to investment firm VanEck.
“AI companies need energy, and bitcoin miners have it,” Van Eck said on Aug. 16. ReportThe company believes that for bitcoin miners, who face profitability risks due to volatile operating costs and Bitcoin (BTC) price fluctuations, redirecting some of their energy capacity to growth areas could be beneficial to their financial health.
“Bitcoin miners generally have bad balance sheets because they have too much debt, too much equity, too much executive compensation, or a combination of all three,” Van Eck argued.
VanEck estimates that if publicly traded bitcoin mining companies shifted 20% of their energy capacity to AI and HPC by 2027, they could “average over $13.9 billion in additional annual profits over 13 years.”
The comments come following recent allegations from investment firm Kerrisdale Capital, which called the bitcoin mining industry a “scam industry.” The firm argued that in its current form, bitcoin mining companies are not a viable business model and are being intentionally diluted as a result.
“They issue equity and put that equity back into the business, but they don’t get any returns,” Sam Adrangi, chief investment officer at Kerrisdale Capital, recently told Cointelegraph.
On the other hand, VanEck noted that the benefit to bitcoin miners entering into such contracts is that AI companies are usually willing to provide the funding needed for capital expenditures.
Core Scientific, the fourth-largest Bitcoin miner by hash rate, recently signed a 12-year contract with AI hyperscaler CoreWeave that is expected to generate over $3.5 billion in revenue by supplying 200MW of infrastructure.
Meanwhile, Canadian mining company Hive Digital Technologies continues to expand its facilities to provide HPC services to companies in the gaming, artificial intelligence and graphics rendering industries, according to its fourth-quarter 2023 report.
Related: Bitcoin miners record lowest daily revenue of 2024
VanEck’s report comes in the midst of a tough year for bitcoin miners, after the bitcoin halving in April cut the mining reward for adding blocks to the blockchain from 6.25 BTC to 3.125 BTC.
Cointelegraph reported on August 2 that U.S.-listed Bitcoin miner Marathon Digital reported second-quarter revenue of $145.1 million, roughly 9% below analyst expectations of $157.9 million.
On April 8, just before the Bitcoin halving, CryptoQuant CEO Ki Young Juthe said that the current cost of mining with an Antminer S19 XP will rise from $40,000 to $80,000 after Bitcoin’s halving in mid-April. At the time of publication, Bitcoin was trading at $59,550, according to CoinMarketCap. data.
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