• The market has begun to view bitcoin miners as AI infrastructure.
• However, the sector lacks about $50 billion to realize its plans.
• VanEck explained which miners could benefit from the AI boom.

Investment company VanEck has published an analysis of the transformation of bitcoin miners into infrastructure providers for artificial intelligence and high-performance computing (HPC). Analysts concluded that the market increasingly values mining companies not as a cryptocurrency business but as operators of data centers for AI. However, between the industry's ambitious plans and their realization there remains a significant financial gap.

According to VanEck's estimates, the sector's aggregate funding need in the near term amounts to about $50 billion, while long-term capital expenditures could reach $221 billion.

The report notes that few sectors have undergone as rapid a transformation as bitcoin mining. Companies that previously earned mainly from bitcoin mining are now reorienting their energy infrastructure toward customers in the AI field, who are willing to pay premium rates amid a shortage of capacity.

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However, the financial results of most companies do not yet match this strategic growth narrative, which creates difficulties in assessing their real value.

Why investors no longer look only at bitcoin mining

VanEck believes that at the current stage the best way to value such companies is the gross energized power metric.

The analysts explained that companies that already have contracts to host AI infrastructure trade at substantially higher multiples than players that merely showcase future projects.

In particular:

• companies without significant contracts are valued at roughly 2-6 times the volume of connected capacity;
• operators with signed agreements receive a valuation at more than a 10x multiple;
• an additional premium goes to firms that have already begun bringing facilities into operation.

VanEck emphasized that going forward the market will value not so much the number of available megawatts as companies' ability to launch data centers on time and generate cash flows.

"We expect valuation premiums to shift from companies that have signed contracts to those capable of delivering on time and within budget: signing lease agreements is only the first step," the report says.

The analysts calculated that the sector has so far brought into operation only about 25% of the capacity already leased out to customers. Because of this, failure to meet construction schedules could lead to a substantial downward revision of company valuations.

Those who control electricity will win

VanEck effectively confirmed a trend previously cited by Bernstein analysts. The latter noted that the main constraint on AI development is becoming not a chip shortage but access to electricity. According to their estimates, public miners control more than 27 GW of potential capacity and have already concluded AI deals worth more than $90 billion.

That is precisely why companies are actively transforming their business models.

For example, after announcing new modular mining infrastructure, Tether stated its intention to gain greater control over energy consumption and the scaling of mining operations.

At the same time, Core Scientific reported the acquisition of the miner Polaris DS LLC for more than $420 million. The deal will allow the company to obtain an additional 440 MW of capacity and expand its HPC infrastructure for AI projects.

The trend has also affected the sector's largest players. In particular, MARA Holdings cut about 15% of its staff as part of a business restructuring and a gradual transition from classic mining to digital infrastructure and AI.

Bitcoin still influences the sector

Despite the reorientation toward AI, VanEck analysts believe the market continues to overestimate most miners' dependence on the price of bitcoin.

According to the company, only a few players have significant exposure to the first cryptocurrency through their own reserves:

• MARA — about 35,000 BTC;
• Riot Platforms (RIOT) — 15,679 BTC;
• Hut 8 (HUT) — 13,696 BTC;
• CleanSpark (CLSK) — 13,561 BTC.

At the same time, a number of companies are already effectively turning into operators of AI infrastructure rather than classic miners.

VanEck noted that the market still often values the entire sector as a single bet on the price of bitcoin, although such logic increasingly fails to match reality.

"Bitcoin still remains a real factor in fluctuations only for a small number of companies, and even within this group the degree of its influence varies, while the market's tendency to value this entire group as a single bitcoin trade leads to an overstatement of the significance of this relationship for those companies that have already changed the direction of their activities," the analysts emphasized.

At the same time, some miners continue to maintain a mixed model. VanEck assigned to this group MARA, CleanSpark, Riot Platforms, HIVE and Bitdeer, which simultaneously develop both a mining business and an AI direction.

In VanEck's view, the main factor for valuing miners in the coming years will no longer be hashrate or mining volumes, but the ability to attract customers from the AI field, finance the construction of new data centers and bring them into operation on time.

However, the situation in the cryptocurrency market remains important for the sector. Earlier, CryptoQuant analysts stated that miners are not yet showing confidence in the formation of a bitcoin bottom, while the reduction of Binance Pool reserves indicates continued selling pressure. 

The industry was additionally affected by the recent drop in mining difficulty of more than 10% — one of the largest declines in the network's entire history.

Source: Incrypted