A recent report from Galaxy Digital indicated that Bitcoin miners have a strategic opportunity to expand into the artificial intelligence and high-performance computing (HPC) data center market, particularly those with advanced infrastructure and experienced management teams. With the growing global demand for infrastructure supporting artificial intelligence technologies, miners who control energy and cooling resources find themselves in an ideal position to support this technological growth.
Revenue Models in the Computing Market Enhance Financial Stability for Mining Companies Galaxy analysts believe that cryptocurrency miners who succeed in building and operating high-performance computing centers can achieve predictable cash flows with high-profit margins, which is a rare stability factor in the highly volatile cryptocurrency markets. These long-term contracts offer mining companies an opportunity for stable returns even during market downturns, which enhances their ability to secure financing from equity or loans without excessive pressure.
Massive Financing Opportunities for Data Center Operators Backed by Reliable Contracts The report explained that in the first quarter of 2024 alone, $18 billion in financing was recorded for data center projects. The report confirms that data center operators with lease contracts from high creditworthiness entities can use these contracts as a tool to obtain massive financing for building and expanding their facilities.
The Valuation Gap Highlights the Investment Advantages of Shifting towards AI One of the key points discussed in the report is the significant valuation gap among companies, where Bitcoin miners typically trade at multiples ranging from 6 to 12 times their earnings, compared to valuations of major data center companies that reach 20-25 times earnings. This gap highlights the market value that cryptocurrency miners could achieve if they successfully enter the artificial intelligence market.
The Shift is Not Possible for All Miners Due to Geographical and Technical Challenges Despite the promising opportunities, the report warned that some current mining sites may not be equipped for this transition, either due to their geographical location or lack of suitable infrastructure or connections, even if they are effective in traditional Bitcoin mining operations.
With expectations of doubling data center capacity in the United States by 2030, Galaxy Digital sees that Bitcoin mining companies that start adapting to the requirements of the artificial intelligence market now could become one of the largest data center operators in the coming years, thus leading the next global computing revolution.
