VanEck Predicts Bitcoin Miners Could Unlock $38 Billion Revenue by Shifting 20% Operations to AI and HPC

VanEck, a well-known asset management firm, predicts that Bitcoin miners could unlock up to $38 billion in revenue. How? By shifting just 20% of their operations to artificial intelligence (AI) and high-performance computing (HPC).

The firm believes that miners can take advantage of their advanced hardware and cooling systems. This move could help meet the growing demand for AI data centers.

Bitcoin mining companies have extensive data centers and significant power resources spread across the United States. This makes them well-suited for compute-intensive AI tasks. Their existing infrastructure is crucial for AI operations, making their facilities highly attractive to AI businesses.

VanEck suggests that if miners allocate 20% of their energy capacity to AI and HPC by 2027, they could see an average annual profit increase of $13.9 billion over the next 13 years. This is a stark contrast to their current net income, which has recorded a loss of $335 million in the past year.

“After accounting for a 17% discount rate, we estimate the net present value of this opportunity at about $37.6 billion,” the firm stated. “This compares to a total market cap of around $19.7 billion for the 12 companies we’re considering as of August 12, 2024.

Entering the AI and HPC sectors could also help improve the financial health of Bitcoin miners. Many of these companies struggle with poor balance sheets due to excessive debt or high executive compensation. However, during the bear market, many have restructured. Plus, AI and HPC clients are often willing to fund capital expenditures. This could lower miners’ costs and help them negotiate better energy deals.

Beyond immediate earnings, VanEck believes that moving into AI and HPC could potentially double the value of mining stocks. Early data shows that miners involved in HPC, like Core Scientific and TeraWulf, are outperforming those without AI and HPC strategies, such as Marathon Digital and Riot Platforms. Notably, Core Scientific and TeraWulf have also outperformed Bitcoin year-to-date due to their focus on AI and HPC revenue streams.

“As the synergies between Bitcoin mining, AI/HPC, and electrical grids continue to develop—ideally in an energy-abundant, tech-friendly regulatory environment—we believe that miners in the MarketVector Digital Asset Equity Index could easily double their market capitalization by 2028, even if Bitcoin profits don’t grow,” VanEck concluded.