Post halving, Bitcoin miners are choosing between hodling BTC and upgrading to AI Post halving, Bitcoin miners are choosing between hodling BTC and upgrading to AI
Stock prices of miners investing in AI have been doing better than those hodling BTC in hopes of future appreciation.
2 min read
Updated: Oct. 19, 2024 at 11:30 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
After the Bitcoin halving took place in April, major Bitcoin miners have increasingly started choosing one of two strategies — either hodl the BTC they mine or gear up with artificial intelligence (AI). The BTC halving slashes the earings of miners by half every four years — a deflationary mechanism that also helps maintain the hard cap of 21 million Bitcoin.
Public miners like MARA Holdings, Riot Platforms, and CleanSpark are holding the BTC they mine in the hope that its value will increase over time.
Wolfie Zhao, an analyst at research firm TheMinerMag, told Bloomberg:
“By avoiding the immediate sale of Bitcoin at a loss, they [miners] can keep potential losses unrealized and position themselves for gains if a bull market materializes.”
However, the strategy that is popular with crypto mining stock traders is an investment in AI. For instance, the stock of Core Scientific nearly quadrupled since it announced the signing of multi-billion-dollar contracts with AI startup CoreWeave. Core Scientific emerged from bankruptcy with a successful restructuring earlier this year.
At the same time, stocks of MARA and Riot, who are betting on holding BTC, have dropped by 20% and 36%, respectively, this year. Similarly, shares of Iris Energy and Bit Digital, which have been investing in AI, have been faring better than those holding BTC.
The strategy of holding BTC seems feasible since miners like MARA and Clean Spark run profitable operations. Besides, in a market with rising Bitcoin prices, the strategy appears to be a good one.
In fact, with the market rising, Bitcoin miners have again started borrowing and issuing more shares. And those like MARA are using the funds to buy more crypto, following in the footsteps of MicroStrategy.
However, Ethan Vera, chief operating officer at Luxor Technology, a Bitcoin mining software and services firm, sounded a warning. He said:
“In a rising Bitcoin price environment, it is going to be an extremely successful strategy, but it’ll be a disaster if Bitcoin prices plummet…You will continue to see negative profits and they are hiding how bad the industry is right now and how bad their operations are by diluting shareholders and buying newer machines.”
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Author 
Monika Ghosh
In 2020, Monika immersed herself in crypto, maintaining skepticism yet firmly believing blockchain could address key issues like financial disparity and transparency. A book-lover, she's also a passionate food enthusiast.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Marathon Digital
Marathon Digital Holdings is a digital asset technology company that mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets.
Riot Platforms
Riot Platforms is a bitcoin mining company, supporting the Bitcoin blockchain through rapidly expanding industrial-scale mining focused in the United States.
CleanSpark
CleanSpark (NASDAQ: CLSK) is a sustainable bitcoin mining and energy technology company that is incorporated in Nevada.
Core Scientific
Core Scientific is a leader in infrastructure and software solutions for Artificial Intelligence and Blockchain.
MicroStrategy
MicroStrategy (Nasdaq: MSTR) is a worldwide leader in enterprise analytics and mobility software.
