Bitcoin Miners Turn to Artificial Intelligence Post Halving: Bitdeer CSO Discusses Innovations and Revenue Pathways
Bitcoin miners are turning to artificial intelligence to navigate the impact of the recent halving event, which occurred late on Friday. The halving event automatically reduced the new issuance of Bitcoin, a process that happens roughly every four years. While halving is designed to counter inflation and historically precedes a surge in Bitcoin’s price, it also directly impacts miners by reducing their rewards.
In response to this challenge, miners, including publicly traded companies, are exploring AI as a potential revenue stream. Bitdeer, a leading player in the industry, has been investing in new data centers and increasing vertical integration through research and development. This has led to new innovations and revenue pathways, such as the company’s recently announced 4nm mining rigs and AI Cloud offerings.
Analysts at Cantor Fitzgerald have recognized Bitdeer as having one of the industry’s lowest “all-in” costs per coin. However, Core Scientific CEO Adam Sullivan believes that only a few operators will be able to make the transition to AI, as Bitcoin mining sites need to meet specific attributes required for high-performance computing.
The trend towards using AI in Bitcoin mining is driven by the increasing need for computing power and infrastructure capable of handling extensive workloads for machine learning applications. CoinShares, a digital asset fund manager, anticipates more miners transitioning towards artificial intelligence in locations with secure energy sources, potentially leading to increased profits.
Mining companies such as BitDigital, Hive, Hut 8, Terawulf, and Core Scientific are either already operating AI operations or actively planning for AI expansion. This shift suggests that Bitcoin mining may move towards stranded energy sites while investment in AI grows at more stable locations.
The recent halving event has had a significant impact on the Bitcoin mining industry, prompting miners to seek alternative revenue streams like AI. Despite a modest impact on miners’ estimated EBITDA margins, the 50% reduction in revenue has led to this exploration. Additionally, the halving has positively impacted Bitcoin’s transaction fees, which have decreased to a five-year low.
Despite potential revenue opportunities, the recent halving could cost miners billions of dollars in revenue. The reduction in daily Bitcoin issuance is crucial to prevent inflation and maintain Bitcoin’s cap at 21 million tokens. The Bitcoin MVRV ratio has fallen below its 90-day average, indicating a potential buying opportunity with a potential 67% gain.
Renowned crypto skeptic Peter Schiff has mocked “Bitcoiners” after the halving event, suggesting that “hodlers” will soon experience a halving of their net worth. Despite this, Bitcoin is currently trading at $65,718, marking a 1.18% increase in the last 24 hours and a substantial 48.78% rise year-to-date.
In conclusion, the integration of artificial intelligence into Bitcoin mining operations represents a significant shift in the industry as miners adapt to the challenges posed by the recent halving event. This move towards AI could potentially lead to increased profitability and efficiency in the long run.
