The giant company that moved from Bitcoin mining to the AI sector is experiencing its own bull market! Here are the details
A new report from fintech and cryptocurrency research firm Rittenhouse Research cited Galaxy Digital's move from Bitcoin mining to artificial intelligence (AI) infrastructure as the primary reason for assigning the company a “strong buy” rating.
Galaxy Digital's shift toward AI, away from Bitcoin mining, is its biggest bullish point, according to Rittenhouse Research
While Galaxy Digital was once a prominent player in the Bitcoin (BTC) mining market, its 2022 acquisition of the Helios data center from troubled miner Argo Blockchain could suddenly give the company the appearance of being a major player in the rapidly growing AI sector.
At the time of the purchase, the move was seen as a lifeline for the struggling crypto miner. However, the rapid rise of high-performance AI platforms like ChatGPT has created a boom in demand for efficient data centers, and Galaxy appears to have one of the most valuable assets in this space.
“Galaxy stumbled upon Helios by accident,” Rittenhouse said in a recent investment note. The company estimates that the data center, which is now focused on serving AI clients, could generate $1.7 billion in EBITDA and $32 billion in market cap in the near future.
While the crypto industry remains volatile due to periodic Bitcoin mining outages and constant hardware upgrades, AI data centers tend to provide stable and highly profitable returns through triple-net leases with major cloud computing players.
Rittenhouse argues that this difference in business models gives Galaxy a strategic advantage by eliminating mining entirely.
“Galaxy has completely shut down its Bitcoin mining operations to focus solely on its dedicated AI data centers, sending a positive signal to potential hyperscale tenants,” the analysts note.
Rittenhouse's report contrasts Galaxy's strategy with the approaches of other crypto miners such as Riot Platforms and Cipher Mining, which have tried to establish themselves as providers of diversified data infrastructure.
However, the report argues that these companies did not have clear AI goals before the field began to boom.
*This is not investment advice.
Source: cryptonews.net
