Bitcoin Miners Shift From Crypto to AI Data Centers

Core Insights - Bitcoin miners are transitioning from cryptocurrency mining to high-performance computing infrastructure, with mining revenue expected to drop from approximately 85% of total revenue in early 2025 to less than 20% by the end of 2026 for companies with AI contracts [1] - This shift indicates a move from low-margin mining operations to high-margin data center contracts, with companies generating 80% to 90% operating margins from AI deals compared to the thin margins of Bitcoin mining [2] Financial Projections - By October 2025, Bitcoin miners had secured $65 billion in contracts with major technology companies and cloud service providers, with AI contracts generating three times the revenue per megawatt compared to traditional mining [3] Company Developments - Six publicly traded mining companies have announced high-performance computing contracts: Core Scientific, Cipher Mining, TeraWulf, Applied Digital, Galaxy Digital, Iris Energy, and Bit Digital [4] - Despite the pivot to AI, publicly traded mining companies increased their Bitcoin mining operations in 2025, adding more computing power in the first nine months than in the same period of 2024, driven by equipment orders placed in 2024 [5] Investment Opportunities - The CoinShares Bitcoin Mining ETF (WGMI) offers exposure to this evolving sector, investing at least 80% of its net assets in companies deriving at least 50% of their revenue from Bitcoin mining or related services, with an expense ratio of 0.75% and a return of 72.05% over the past year [6]