Bitcoin Miners Are Well Positioned to Ride the Boom in Artificial Intelligence

By one measure, Bitcoin miners trade at a 90% discount relative to legacy data centers, Bernstein analysts note in their new Blackbook

Bitcoin miners are well positioned to ride the boom in artificial intelligence, promising a safety net for the industry during energy price spikes or cryptocurrency downturns, according to a new report from Bernstein.

The report, published Monday, highlights the growing appetite for energy among AI providers, which is creating opportunities for miners that have the capacity to provide cheap, reliable power.

"Bitcoin miners find themselves in a unique position, led by their disproportionate 'power access' in a power-constrained world," Bernstein analysts wrote in their new Blackbook, an annual deep dive into the cryptocurrency.

"This access to 'ready,' cheap power, combined with data centre capabilities, positions Bitcoin miners as attractive partners for AI cloud providers looking to accelerate time-to-market."

While legacy data centres are valued at $30 million to $50 million per megawatt, Bitcoin miners are valued at just $2 million to $4 million per megawatt, the analysts noted.

"We believe the market is underestimating this value of 'power access' and penalising miners for Bitcoin cyclical volatility," the analysts wrote.

"Thus, AI DC diversification would enable miners to trade closer to their potential as 'energy' assets."

Core Scientific, a miner that has embraced a pivot to AI, has seen its shares rise almost 300% in 2024.

The company secured a 12-year, $6.7 billion contract with Nvidia partner CoreWeave in which it will build and run an AI data centre while CoreWeave pays for the hardware, power, and more, the analysts noted.

"This contract highlights the value proposition of Bitcoin miners to AI cloud providers, as CoreWeave gains access to cheap, reliable power and data centre capacity," the analysts wrote.

"Importantly, Core Scientific is able to pivot a portion of its energy capacity to AI while maintaining its Bitcoin mining operations, a key advantage over legacy data centres."

According to the analysts, one-fifth of Bitcoin miners' energy will be dedicated to artificial intelligence by 2027.

The report also highlights the potential forластиBitcoin miners to benefit from any upswing in Bitcoin prices, which are currently trading at around $70,000.

Bernstein is notably bullish on this front, having predicted earlier this year that Bitcoin is headed to $200,000 by the end of 2025 and $1 million by 2033, driven by institutional adoption.

In fact, the analysts expect Wall Street to become the largest holder of Bitcoin by year's end, surpassing even Bitcoin's pseudonymous creator, Satoshi Nakamoto.

Nakamoto holds an estimated 1.1 billion Bitcoins, though it is unknown whether they have access to those tokens or whether they are still alive.