The founder of Capriole Investments has warned that the Bitcoin miner AI pivot could result in mining revenue plunging to 30% in 2-3 years.
Bitcoin Mining Companies Are Fast Pivoting To AI
In a new post on X, Capriole Investments founder Charles Edwards has talked about the transition that the Bitcoin mining industry has been going through. Many major public mining companies have announced an AI pivot to at least some degree.
Below is a table that assembles the data related to the public miners in the process of shifting toward the AI compute business.
Looks like revenue from AI is still not that high for most miners | Source: @caprioleio on X
As is visible, all of these Bitcoin mining companies have made statements announcing a push into AI. Though, while these companies have been expanding into the industry, most of them haven’t started generating a significant revenue from the business yet. On average, AI is making up for 13% of the revenue of the major miners, leaving BTC as still the majority source of income for these firms.
This might not last too long, however, if the targets announced by the miners are anything to go by. From the table, it’s apparent that most of these companies are targeting AI revenue to cover the majority of their income by 2027-2028. “On average current Bitcoin revenue is expected to drop from 90% to just 30% in the next 2-3 years!” noted Edwards.
The companies who are targeting a complete or near-complete transition also happen to be the ones that have seen their stock perform the best in the market. “Those with 80%+ AI share of revenue targets saw their stocks climb up over 500% on average,” explained the analyst. “Those targeting <60% AI revenue saw 1/10th the growth, with many having negative 2 year returns.”
Bitcoin is a cryptocurrency that’s secured by its mining network, but given the pivot that the major miners are making, it would appear that the energy allocation toward the network is weakening.
In terms of real-world impact, it’s unclear whether the AI push has influenced the network’s trajectory so far. According to data from Blockchain.com, the Bitcoin Hashrate, a measure of the total amount of computing power connected to the blockchain, has gone down during the last few months. This could make it seem like the recent pivot toward the high-performance computing business is behind the downtrend, but it might very well just be a consequence of the Bitcoin price decline.
The 7-day average value of the Hashrate has gone down in recent months | Source: Blockchain.com
Nonetheless, even if AI hasn’t directly impacted the Hashrate yet, the revenue projections suggest that a shift could soon be coming, and a notable one at that. “Bitcoin used to be famed for having the biggest computing network in the world,” said Edwards. “It’s now collapsing into AI at record pace.”
BTC Price
At the time of writing, Bitcoin is floating around $76,200, up 5.5% in the last seven days.
The price of the cryptocurrency has risen recently | Source: BTCUSDT on TradingView
