Bitcoin’s recent struggles have infected shares of crypto miners in significant fashion. In what’s often a bullish seasonal stretch for the largest digital currency, bitcoin is faltering. And mining equities are performing even more poorly.
There’s at least one recent example of a crypto miner heading to capital markets to raise cash in an effort to contend with faltering prices. However, it’s not all bad news for the industry and ETFs, such as the CoinShares Valkyrie Bitcoin Miners ETF (WGMI). Yes, WGMI has encountered its share of downside in recent weeks. But there are signs sentiment could change for the better.
In fact, some members of the WGMI portfolio are learning from this bitcoin pullback and saying, “Enough is enough.” Take the case of Bitfarms (BITF), one of the ETF’s largest components.
Bitfarms Deploying Interesting Playbook
Following a $46 million quarterly loss, which was largely the result of mining activities, Bitfarms is exiting the industry to focus on AI and hyper-computing. It’s a playbook other WGMI holdings could mimic in the future. Some already are, though they’re not completely abandoning mining.
“The Company’s 18 MW Bitcoin mining facility in Washington State will be the first site fully converted to support HPC/AI workloads with up to 190KW per rack and advanced liquid cooling,” according to a statement issued by the WGMI holding. “Bitfarms has signed a fully funded, binding agreement of US$ 128 million with a large publicly traded American multinational provider of critical infrastructure and services for data centers. Under the terms of the agreement, the partner will supply all critical IT equipment and building materials for 18 MW of gross capacity with an anticipated industry leading PuE, between 1.2 and 1.3. The site is targeted for completion in December 2026.”
Importantly, Bitfarms is far from the only WGMI member firm making AI and hyper-computing strides. That progress is being met with open arms from companies, including Alphabet (GOOGL) and Antropic, who need the computing power possessed by crypto miners. That’s confirmation there’s runway for WGMI holdings to reduce or shed their dependency on mining bitcoin.
For many WGMI member firms, that evolution could be pivotal, because at several things are becoming abundantly clear. First, there’s ready-made demand from AI hyperscalers. Second, bitcoin is getting costlier and less rewarding. Third, some experts believe only the most financially sturdy miners will survive long-term, perhaps implying the AI/hyper-computing moves make sense.
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