Title: Bitcoin Miners Diversifying Into AI Data Centers to Attract Institutional Investors – Bernstein Report
Investing.com – Bitcoin miners are increasingly turning to AI data centers to establish sustainable business models and appeal to institutional investors, as noted by Bernstein analysts on Monday.
Several major miners, such as Marathon Digital and Core Scientific Inc, have recently secured significant funding through convertible notes, each taking their own unique approach. Marathon Digital raised $300 million to purchase more Bitcoin, following MicroStrategy's lead in using convertible notes to acquire the cryptocurrency as a corporate treasury asset.
Marathon's notes were priced with a 25% premium and a 2.125% coupon, maturing in 2031. On the other hand, Core Scientific obtained $400 million with a 3% interest rate over five years, with plans to pay off high-cost debt and acquire AI-focused data centers.
Bernstein highlights a growing divide among Bitcoin miners, with some staying committed to Bitcoin mining while others pivot towards AI data centers. This "Mullet strategy" puts AI data centers in the spotlight while maintaining Bitcoin mining in the background.
The report raises the question of whether all Bitcoin miners should transition to AI data centers, citing strong interest from institutional investors in miners adopting AI/HPC strategies. Bernstein suggests that this shift could offer miners a more sustainable economic model, especially as the AI industry attracts significant investments.
Furthermore, U.S.-listed Bitcoin miners have an advantage over unlisted and non-U.S. counterparts due to access to deep capital markets. Bernstein's note supports a bullish stance on U.S.-listed Bitcoin miners as market consolidators.
Analysts also mention the upcoming U.S. elections, noting Polymarket trends indicating a close race between Trump and Harris. The uncertainty surrounding the election is keeping Bitcoin and crypto markets range-bound, with Bernstein reaffirming their view that a Republican victory, particularly by Trump, would likely be viewed positively in the crypto market.
Analysis:
- Bitcoin miners are exploring AI data centers to attract institutional investors and establish sustainable business models.
- Some miners are transitioning to AI data centers, known as the "Mullet strategy," while others remain focused on Bitcoin mining.
- U.S.-listed Bitcoin miners have a competitive edge due to access to deep capital markets.
- The upcoming U.S. elections are impacting the crypto market, with a Republican victory potentially viewed positively.
- Investors should consider the implications of miners diversifying into AI data centers and the potential impact on the crypto market.