Bitcoin Miners’ $50B AI Bet Faces Reality Check, Warns VanEck

VanEck says investor attention is shifting from headline AI deals to the execution risks facing bitcoin miners pursuing new revenue streams.

After spending the past two years repositioning themselves as AI infrastructure providers, bitcoin miners are entering a more challenging phase: proving they can deliver on those ambitions.

In a recent report, VanEck noted that markets are moving beyond the excitement of AI-related contract announcements and are now focused on whether miners can successfully finance and build the large-scale data centers required to serve AI clients.

The firm estimates the industry faces an immediate funding gap of around $50 billion, with long-term capital requirements reaching roughly $221 billion if current expansion plans move forward.

“Execution, not signing, becomes the next premium,” said investment analyst Griffin MacMaster and Matthew Sigel, VanEck’s head of digital asset research. They added that only about 25% of the AI and high-performance computing (HPC) capacity leased so far has actually been delivered. Companies that fall behind on construction timelines risk structural valuation declines.

The shift comes as the bitcoin mining sector undergoes a major transformation. Following the sharp drop in mining profitability after the 2024 halving, many firms began redirecting their power infrastructure toward AI workloads, betting that tech companies would pay significantly more for energy and data center capacity.

Core Scientific (CORZ) accelerated this transition by signing a multibillion-dollar hosting deal with AI firm CoreWeave, reshaping its identity from a bitcoin miner into an AI infrastructure provider. Other players — including TeraWulf (WULF), Hut 8 (HUT), Iren (IREN), and Cipher Mining (CIFR) — have also announced plans to lease power and data center capacity to AI and HPC clients. Meanwhile, Marathon Digital (MARA), Riot Platforms (RIOT), and CleanSpark (CLSK) are adopting hybrid strategies, maintaining mining operations while exploring AI opportunities.

Despite bitcoin falling roughly 24% since January and broader crypto equities struggling, mining stocks have largely rallied. Riot is up nearly 94% year-to-date, while Cipher Mining has gained about 62%, with similar trends across the sector.

This AI-driven narrative has fueled some of the strongest stock performances in crypto over the past year, with investors increasingly valuing these companies based on their AI potential rather than their traditional mining businesses.

However, VanEck argues that valuations remain complex, as companies straddle declining mining revenues and AI operations that have yet to generate meaningful cash flow.

For now, the firm points to “energized power” — the amount of active power infrastructure — as the most reliable valuation metric. Companies with signed AI contracts are trading at multiples above 10 times energized power, while those still pitching future projects command lower valuations.

VanEck also expects investor focus to shift toward tenant quality. Firms serving investment-grade hyperscalers are likely to benefit from lower financing costs and higher valuations compared to those working with smaller AI startups.

The report highlights HIVE, Bitdeer (BTDR), Keel, and IREN as potential upside candidates if they secure additional contracts, while suggesting companies like MARA, CLSK, and RIOT remain more closely tied to bitcoin price movements.

Ultimately, VanEck sees the next phase of the industry as being less about announcing AI ambitions and more about demonstrating the ability to finance, build, and operate large-scale infrastructure. The companies that succeed will be those that can convert leased power capacity into fully operational data centers on time and within budget.

About The Author

ctleditor

See author's posts