As the days of "mining" become increasingly difficult, major mining companies are seeking alternative paths.$Core Scientific (CORZ.US)$After signing a series of cooperation agreements with AI companies, the stock price surged by nearly 300% in six months. The mining companies developing AI datacenters$TeraWulf (WULF.US)$have also doubled their stock price this year.
Due to the "halving" leading to reduced mining rewards, more and more mining companies are seeking new ways of survival.$Bitcoin (BTC.CC)$Six months after the halving, mining companies are turning to AI one after another.
On October 20, it was reported that the USA bitcoin miner $Core Scientific (CORZ.US)$ since announcing a series of multi-billion dollar contracts with the AI startup CoreWeave, its stocks have almost tripled. This mining company will revamp some of its datacenters to host over 200 megawatts of GPU for CoreWeave.
The mining company developing AI data centers— $TeraWulf (WULF.US)$ has also doubled its stock price this year. Other bitcoin miners embracing AI like $Iris Energy (IREN.US)$And.$Bit Digital (BTBT.US)$Their stocks generally outperform those of peers who concentrate resources on holding bitcoin.
As mining days become more challenging, major bitcoin miners are seeking transformation. They are replacing some mining equipment with devices for running and training AI systems, believing that AI training provides more stable and secure income compared to the fluctuating crypto market.
Since the introduction of bitcoin in 2009, mining rewards have halved four times. The first halving occurred in November 2012, reducing the reward from 50 BTC to 25BTC. The subsequent two halvings took place in 2016 and 2020. Recently, in April 2024, mining rewards halved again to 3.125BTC per block.
Some mining companies are holding firm on bitcoin, but their stock performance is bleak.
While many mining companies are actively turning to AI, there are still some businesses focusing on mining and holding bitcoin.
For example$MARA Holdings (MARA.US)$,$Riot Platforms (RIOT.US)$And.$CleanSpark (CLSK.US)$Mining companies are strong hodlers of bitcoin (Hodl is an industry term meaning to hold cryptocurrencies for the long term). They hold onto the bitcoin they mine and expect this asset to continue appreciating in the future.
However, the stock performance of these companies is very bleak. The two major listed bitcoin mining companies, MARA and Riot, have seen their stock prices fall by 17% and 36% this year, respectively.
However, Macquarie Capital USA analyst Paul Golding believes that pure bitcoin mining still has a place in the current market, especially in expanding mining capacity to create economic value. He is optimistic about MARA, Riot, Core Scientific, $Iris Energy (IREN.US)$Please use your Futubull account to access the feature.$CleanSpark (CLSK.US)$And$Cipher Mining (CIFR.US)$All rated as 'outperforming the large cap'.
JPMorgan analysts believe that bitcoin miners are no longer limited to traditional mining operations, they can also leverage their own electrical and computing resources to flexibly transition into high-performance computing (HPC) and AI computing hosting centers, thus opening up new revenue streams. Tech giants can acquire valuable electrical resources through partnerships or direct acquisitions with these mining companies, thereby increasing their computing power, driving further development of AI businesses.
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