Bitcoin miners are navigating a complex transition; having invested heavily over the past two years into becoming AI infrastructure providers, they now face heightened scrutiny regarding their ability to deliver. According to VanEck's recent analysis, the initial excitement around AI contracts is shifting toward a more pressing concern: can these companies secure the massive financing required for data centers that serve the AI market?
VanEck estimates a sizable funding gap of approximately $50 billion in the near term, with long-term capital needs potentially totaling $221 billion if current expansion ambitions materialize. Griffin MacMaster, a VanEck investment analyst, emphasizes that it’s about "execution, not just signing deals." Investors are wary, as the industry has completed only about 25% of the AI and high-performance computing capacity it has leased.
The bitcoin mining landscape has dramatically shifted following diminishing profitability, compounded by the 2024 halving. Many miners have begun retooling their operations to accommodate AI workloads, banking on the assumption that tech firms will pay substantially more for power and data center capabilities than bitcoin mining ever would.
Companies like Core Scientific have taken significant steps, such as a multi-billion-dollar hosting agreement with CoreWeave, effectively transforming from bitcoin miners into robust AI infrastructure providers. Other firms, including TeraWulf, Hut 8, and Cipher Mining, have rolled out plans to lease their available power and data center resources to clients requiring AI and high-performance computing solutions. Meanwhile, companies like Marathon Digital, Riot Platforms, and CleanSpark are exploring hybrid models that blend traditional mining with emerging AI opportunities.
Despite bitcoin itself seeing a decline by roughly 24% this year, many miners are experiencing impressive stock performances. For instance, Riot has surged nearly 94% year-to-date, with Cipher Mining seeing a 62% increase. This new narrative has led to some of the most substantial stock movements in the crypto sector over the past year, as investors refocus their valuations on AI capabilities rather than just mining potential.
Nevertheless, VanEck warns that current valuations remain ambiguous, as businesses are found in a transitional state plagued by old mining revenues and nascent AI operations that have yet to bring in substantial cash flow. The investment firm suggests that the best way to measure these companies now is by assessing "energized power," or the actual operational power infrastructure at their disposal. Those with established AI leases command valuations of over ten times their energized power, while miners still in the pitch phase for future endeavors trade at much lower multiples.
Moreover, the quality of the clientele will likely shape future valuations significantly. Operators that can provide services to investment-grade hyperscalers may benefit from decreased financing costs and improved valuation metrics compared to those working with smaller AI startups.
VanEck noted several companies—such as HIVE, Bitdeer, Keel, and IREN—would see upside potential if they can secure further contracts. Conversely, firms like Marathon, CleanSpark, and Riot may remain more tethered to the unpredictable swings in bitcoin’s price.
Looking forward, VanEck suggests that the industry is entering a phase increasingly focused on the practical aspects of AI integration—namely, the ability to finance, construct, and manage large-scale infrastructure projects. Those that can convert leased energy into operational data centers on schedule will likely emerge as the leaders in this evolving sector.
At the same time, the broader market for cryptocurrency trading has shown signs of slowdown; exchange volumes decreased by 3.45% in May, dropping to $4.41 trillion, the lowest since September 2024. In contrast, some sectors like RWA perpetual futures saw impressive gains, climbing 10.4% and achieving an all-time high.
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