🟪 Are we in bitcoin mining’s ‘new normal’?

When it comes to pure revenue, I think it’s safe to say yes.

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Jimmy Buffett

Are we in bitcoin mining’s ‘new normal’?

A few months past this year’s bitcoin block reward halving, it may be time to start asking: Are we in a new normal? 

When it comes to pure revenue, I think it’s safe to say yes. The Block’s Lars Hoffmann reported this week that bitcoin miners hauled in roughly $961 million in June — the second straight month that the top-line revenue figure was sub-$1 billion.

I don’t think this is any surprise — rewards, after all, were programmatically cut by 50% — and transaction fees continue to account for a small slice of the pie. Assuming that bitcoin’s price continues its plodding, sideways path for the foreseeable future, it might be fair to guess that mining revenue might be at least somewhat consistent looking ahead.

Where will the growth come from? Deals, to sum it all up — M&A, AI, IPOs and more. 

On the latter front, Bloomberg’s crypto team scooped that cloud and data center company Northern Data is mulling an IPO for its combined data center and AI business. The business could debut on Nasdaq to the tune of $16 billion, Bloomberg writes. 

The Blockworks team has spilled a great deal of ink so far on the growing intersection between bitcoin mining and AI. It’s not a new intersection — wind the clock back a year and you’ll find such diversification efforts in full swing — but the halving has likely poured fresh gas on the flame of progress. 

Another driver: Wall Street’s appetite for AI plays. Investors aren’t just chasing the tech companies; as The Wall Street Journal reported in May, the AI boom is pushing money toward power utilities and other firms that will fuel the industry. 

Northern Data’s potential move makes sense within that framework. Investors want exposure to AI infrastructure plays, and Northern Data is in a position to provide it. Time will tell how, precisely, they go about doing so.

As the Empire newsletter team detailed last week, other mining firms are staking out their plays as well. As June drew to a close, Core Scientific struck a deal with CoreWeave to the tune of 70 MW worth of power infrastructure. Big stuff, and perhaps remarkable given that CoreWeave wanted to buy the mining company for a cool $1 billion. 

Some terminology in Core’s press release caught my eye. Namely: "application-specific data centers." I’ve not come across this phrase before, but I think we’re going to see more and more of it. 

It’s not impossible that "bitcoin mining companies" become "application-specific data companies" with bitcoin as one among a number of revenue streams. After all, AI is a natural fit for these companies, given their expertise in harnessing huge amounts of power and keeping these ASICs cool while operating 24/7.

In recent comments to Blockworks, Hut 8 CEO Asher Genoot was asked whether the company would lean deeper into one side or the other — bitcoin or AI/high-intensity compute — with Genoot remarking that such a choice wasn’t really necessary.

"I don’t think we need to choose to go all in on one or the other because you also have different pools of capital that will fund the growth," Genoot told Blockworks’ Ben Strack. "It would be a shame to not grow bitcoin mining when we’re one of the largest operators of bitcoin mining facilities in the world today — and continuing to maintain that footprint while expanding and growing within a new business vertical."

Lest we forget: Many of these companies are publicly traded. 

If bitcoin mining stocks were once thought of as proxy vehicles for bitcoin exposure, it’s not outside the realm of possibility that, one day, these stocks will serve this function as an AI access point, or a mix of both.

There’s a narrative Wall Street can certainly sell: X or Y company is a buy because it offers exposure to a blend of digital commodities — bitcoin and AI compute — in an increasingly competitive space.

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