Bitcoin miners are expanding into related areas like chip manufacturing and AI computing to cope with the impact of the halving event in April 2024. According to analyst notes reviewed by Cointelegraph, revenue from these areas will be a focus of attention in the Q4 financial reports of major mining companies.
Impact of the Halving and Miners’ Response
The halving event reduced the mining reward from 6.25 BTC to 3.125 BTC per block, significantly affecting the profitability of Bitcoin miners. Riot Platforms (RIOT) and Bitdeer (BTDR) are scheduled to report on February 24 and 25, respectively, while Marathon Digital (MARA) and Core Scientific (CORZ) will report on February 26. Riot, Bitdeer, and Marathon reported lower-than-expected revenue in November due to narrowing mining margins.
However, analysts remain optimistic about the growth potential from related businesses, including high-performance hardware rental services for AI and sales of specialized ASICs.
Bitdeer and Riot Platforms Growth
Bitdeer is being praised by analysts for its in-house ASIC development. HC Wainwright & Co. believes that demand for Bitdeer’s ASIC products from external customers has been strong from the start, raising its price target for BTDR shares to $18, up from around $13 on Feb. 24.
Riot Platforms is also adjusting its strategy to capitalize on the AI market. The company has lowered its 2025 hashrate forecast twice since October 2024 to assess the feasibility of using its remaining mining capacity for AI and HPC computing. RIOT shares are rated “buy” with a $17 price target, compared to a current value of around $10 on Feb. 24.
Cost-cutting and infrastructure expansion trends
Major mining companies are also looking to reduce costs by investing in energy and data center infrastructure. Bitdeer plans to spend $100 million to build a power plant and data center in Alberta, Canada. Marathon is also committed to expanding its portfolio of owned and operated sites to optimize costs.
Opportunities from the AI boom
The demand for computing power for AI is opening up a huge opportunity for Bitcoin mining companies. According to Matthew Sigel, head of digital asset research at VanEck, "AI companies need energy, and Bitcoin miners own the resources." This has helped mining companies quickly enter the AI and HPC space.
In December, Starboard Value, an activist hedge fund, bought a stake in Riot to help the company expand into the AI market. By February, Riot announced changes to its board of directors and is planning to formally evaluate AI opportunities for the company.
Moving into related fields not only helps Bitcoin mining companies make up for lost revenue but also opens up long-term growth potential, especially in the context of the AI industry's growing demand.
