AI Won’t ‘Kill’ Bitcoin Mining – It Might Reprice It
Since the most recent Bitcoin halving lower block rewards in half, compressing revenues throughout the mining sector, massive operators have been trying to find methods to stabilize earnings streams.
Increasingly, they’re leasing their power footprints to synthetic intelligence and high-performance computing shoppers. The mannequin just isn’t speculative; it’s already being written into multiyear contracts.
In September, Cipher Mining signed a 168-megawatt settlement with Fluidstack, an AI cloud supplier. The deal runs for ten years and is valued at $3 billion. Google offered financing help value $1.4 billion and in addition acquired a 5% fairness stake in Cipher.
The association permits Cipher to take care of possession of its amenities whereas changing a part of its energy allocation into contracted AI income.
TeraWulf, another U.S.-based miner, adopted the same path. It introduced internet hosting agreements that dedicate greater than 200 megawatts to AI workloads at its Lake Mariner website. Analysts estimate the worth of the deal might exceed $3.7 billion.
Contracts That Change Miner Balance Sheets
The monetary character of those corporations is starting to alter. Miner fairness has traditionally traded with a high correlation to the value of Bitcoin. New long-dated contracts give buyers a special danger profile to think about. Regular dollar-denominated funds from AI prospects could cut back the publicity of miner shares to Bitcoin cycles.
Iren, an Australian operator, gives an instance. It just lately expanded its AI cloud business by buying greater than 12,000 GPUs. The firm initiatives $500 million in annual AI income by early 2026. Analysts at Arete initiated protection on Iren, Riot Platforms, and Cipher Mining with purchase rankings, citing the steadiness of contracted AI income as a driver.
The case of CoreWeave and Core Scientific stresses the purpose. CoreWeave, as soon as an Ethereum miner, shifted into GPU-based internet hosting. In 2025, it acquired Core Scientific in a transaction valued at $9 billion. The deal cemented its place as a provider of computing energy for AI corporations, shifting fully past token mining.
Why the AI Shift Is Different
The entry into AI internet hosting just isn’t merely diversification. It forces miners to rethink operations. Unlike Bitcoin mining, AI prospects demand strict service degree agreements. Data facilities should provide redundancy, cooling effectivity, and long-term upkeep commitments. In apply, this implies capital is redeployed from short-cycle ASIC purchases towards infrastructure upgrades that help higher-density workloads.
There can be the allocation query. Every megawatt dedicated to AI internet hosting can’t be used for Bitcoin mining. Operators must stability the quick predictability of contracted income with the choice worth of a possible Bitcoin value rally.
From Hashprice to Lease Price
The mining business has lengthy been tied to hashprice, the greenback worth of 1 terahash of computing energy per day. That metric is now being supplemented by what may very well be referred to as lease value, the worth of contracted energy offered to exterior shoppers. In time, the lease value could develop into as influential for valuation fashions because the hash value itself.
This shift has implications for the broader community. If miners dedicate extra capability to exterior internet hosting, the expansion of community hash charge could sluggish.
That might alter the aggressive dynamics amongst remaining pure miners and influence issue changes. At the identical time, the capital stability offered by AI contracts might preserve some corporations alive by means of durations of low Bitcoin costs, stopping sharp declines in whole hash charge.
A Changing Capital Formation Cycle
The sector’s capital cycle can be adjusting. Past expansions had been usually financed throughout bull markets when high margins justified the speedy buy of machines. Now, multi-year AI contracts present the collateral base for elevating capital in much less favorable markets. That modifications the rhythm of how mining infrastructure is constructed.
The long-term end result just isn’t that AI erases mining. Rather, it layers one other financial exercise on high of the identical infrastructure. For buyers, miner equities could look much less like high-beta proxies for Bitcoin and extra like hybrid corporations that mix commodity-linked earnings with contracted service income.
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