Experts say Bitcoin miners with the right infrastructure and management skills could reap significant benefits by entering the rapidly growing AI and high-performance computing data center market.
According to research conducted by Galaxy Digital, with the increasing need for AI infrastructure, crypto miners with access to electricity and cooling systems could benefit by supporting high-performance computing tasks.
Analysts believe that companies with experienced management teams capable of delivering on AI and HPC projects have a “significant opportunity” to create “significant additional value” for their organizations. The appeal lies in long-term contracts and sustainable cash flow models from AI and HPC deployments, which Galaxy Digital describes as “predictable and highly profitable cash flows” — a level of stability often missing from cryptocurrency markets.
“Not only is revenue more predictable than Bitcoin mining revenue, but it is also uncorrelated with cryptocurrency markets, helping to smooth out the financial profiles of companies heavily exposed to crypto market volatility. In a Bitcoin bear market, this could improve financial resilience by allowing miners to continue to raise capital through equity or debt without facing excessive dilution or interest burden.”
Galaxy Digital
Financing options are also expanding. Data center operators with a lease with a trusted counterparty “can leverage this agreement to raise significant amounts of project financing for data center construction,” Galaxy says, citing $18 billion in development financing secured in the first quarter of 2024 alone.
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An additional important aspect is the valuation gap: the report points out that Bitcoin (BTC) miner stocks are typically valued at 6-12 times their earnings, while some of the largest data center operators are valued at 20-25 times earnings.
Key Differences Between AI Data Centers and Mining Data Centers | Source: Galaxy Digital
However, not all crypto mining platforms are suitable for this transformation, notes Mike Novogratz of Galaxy Digital, emphasizing that some may not have the necessary conditions for AI and high-performance computing, even if they are still suitable for Bitcoin mining.
Galaxy points out that with data center capacity in the US projected to double by 2030, miners that begin adapting now could become “some of the biggest players in the industry.”
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Source: cryptonews.net
