Bitcoin miners are embracing AI as an alternative income amid declining mining revenues. Potential miner capitulations are a buying signal for BTC as hash ribbon spikes continue.
More bitcoin [BTC] miners, such as Core Scientific, are massively diversifying into AI (artificial intelligence) to boost revenue streams after the April halving event.
April’s BTC halving event reduced miners’ block reward from 6.25 BTC to 3.125 BTC, cutting their revenue in half.
As of June 5, the daily revenue of bitcoin miners was $30.05 million. According to YCharts, this was more than 70% less than the record $107 million set on the halving day in April 2024.
AI to Solve Bitcoin Miners’ Income Problems?
Following OpenAI’s successful ChatGPT AI model, miners are shifting their focus to AI computing due to higher rewards and growing demand, CNBC reported.
Bit Digital now derives 27% of its revenue from AI, according to the report. Hut 8, another BTC miner, and Hive generated 6% and 4% of their revenue from AI, respectively.
The shift to AI will help create, according to Adam Sullivan, CEO of Core Scientific, “Diversified business model and more predictable cash flows.” Given the reported capitulations of miners, AI diversification may be a welcome relief.
Are Some Bitcoin Miners on Their Way Out?
In mid-May, an AMBCrypto report found that bitcoin’s network hashrate dropped significantly, along with possible miner capitulations, amid spikes in bitcoin hash ribbons.
Hash ribbons track the short- and long-term moving averages of bitcoin’s hashrate. Spikes in this metric indicate low mining activity or the departure of less efficient bitcoin miners.
The Hash Ribbons signal has been sustained, and crypto hedge fund Capriole Investments called the recent spike a “tantalizing bitcoin buy signal.”
“Hash Ribbons is back. Perhaps the best long-term bitcoin buy signal out there, Hash Ribbons is now tempting us with the current mining capitulation that began two weeks ago,” as published by CryptoQuant.
In addition, the bitcoin mining pool hit an annual low of 1.8 million BTC. This low was last seen 14 years ago and suggests that miners are dumping their holdings, likely through over-the-counter (OTC) markets.
Perhaps another piece that supported the “buy” signal from the hash bands was Willy Woo’s assertion that institutional traders “took a risk” and turned to buying. Should people follow the pros or wait for a range breakout?
Bitcoin Miners May Shift to AI Due to Potential for Higher Revenue
Crypto miners may switch to artificial intelligence (AI) in energy-secure locations after bitcoin (BTC) halved due to the potential for higher revenues, CoinShares (CS) said in a report on Friday.
Friday night saw the four-year halving, which slows the rate of bitcoin supply growth by 50%. Coinshares notes that mining companies such as BitDigital (BTBT), Hive (HIVE) and Hut 8 (HUT) are already generating revenue from AI. At the same time, TeraWulf (WULF) and CORE Scientific (CORZ) have existing AI operations or plans to grow in the space.
This trend suggests that bitcoin mining may increasingly move to abandoned power sites, while AI investment grows in more stable locations,” the authors, led by James Butterfill, wrote.
According to the asset manager’s projections, the hashrate could rise to 700 exahash by 2025, but could fall 10% after the halving as miners shut down unprofitable machines. Hashrate prices are expected to fall to $53 per hour per day after the event.
By Leonardo Perez
