Bitcoin mining has grown from a hobbyist pursuit into a multibillion-dollar industrial sector. Another shift may be underway, this time fueled by AI demand. CoinShares explored that convergence during Monday’s webcast hosted by Kirsten Chang, senior industry analyst at VettaFi.
Key Takeaways:
- Bitcoin miners are pivoting toward AI, with 80% of miner revenue expected from AI workloads by year-end.
- Public bitcoin miners have signed about 20 AI contracts worth roughly $85 billion in revenue.
- Most institutional allocators hold 1% or less in bitcoin, though every type of institution has now allocated.
Matthew Kimmell, investment strategist at CoinShares Valkyrie, argued that bitcoin miners are uniquely suited to benefit from the AI buildout. Large-scale miners already operate the core infrastructure AI demands, Kimmell said. That includes gigawatt-sized data centers, dedicated power supply, and industrial cooling systems.
Before turning to mining economics, Kimmell addressed bitcoin’s current price. Bitcoin was near $65,000 at its 200-week moving average. That level has historically marked cycle lows, including the 2020 COVID crash and FTX’s collapse in 2022, he said. For long-time bitcoin holders, it has typically served as an accumulation zone — a price range where investors with conviction tend to buy, expecting recovery.
See more: Macro Pressure Keeps Bitcoin Capped
Digital asset exchange-traded products have seen about $260 million in outflows year-to-date, largely a bitcoin story, Kimmell noted. First-quarter filings showed the largest quarterly reduction in U.S. bitcoin ETF holdings since those products launched in January 2024. Still, 95% of that selling came from hedge funds and brokerages, not longer-term holders.
Most institutional allocators hold 1% or less in bitcoin, Kimmell said. Even so, every type of institution has made an allocation, from pensions to sovereign wealth funds.
A live audience poll conducted during Monday’s webcast found that 62% of attendees were already allocated to AI infrastructure. However, 27% reported having no exposure to any of the related themes.
Mining and the AI Buildout
CoinShares expects roughly 80% of public bitcoin miner revenue to come from AI workloads by year-end, Kimmell said. Eight of the largest publicly traded miners had about two gigawatts of capacity operating across roughly 50 sites. More than five gigawatts are under construction, with another 12 in the disclosed pipeline.
Those miners have signed about 20 disclosed AI contracts since April 2024, according to Kimmell. Together, the deals represent roughly $85 billion in contracted revenue. Co-location agreements typically run five to 15 years, with some stretching to 25 years.
Kimmell flagged counterparty risk, Texas grid concentration, and construction delays as potential complications. Even so, he compared the AI infrastructure boom to the American auto industry. Kimmell called it “the great monetization of electrons.”
Bitcoin mining’s role extends beyond the AI pivot, Kimmell argued. Miners can scale power consumption up or down anywhere in the world, without a contract, he said. That flexibility makes them natural buyers of otherwise untapped power, including stranded solar, wind, and hydro.
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