Bitcoin mining costs has surged past $70,000, and Wall Street is funding miners’ AI escape hatch

Wall Street is investing heavily in public Bitcoin mining companies, viewing them as essential power infrastructure for the booming AI sector, which faces severe electricity constraints. Miners are leveraging their existing grid interconnections and sites to secure multi-year, contractable cash flows by retrofitting for high-performance computing, moving away from volatile crypto rewards. This shift is driven by the fact that US data center electricity demand is projected to surge dramatically, outpacing grid buildout capabilities. The urgency is compounded for miners by declining profitability post-halving, pushing the average cash cost to produce a Bitcoin past $70,000. However, transitioning a basic crypto mine into a Tier-3 AI data center requires immense capital expenditure for infrastructure upgrades like liquid cooling and redundant networking. To bridge this gap, miners are securing financing backed by hyperscalers like Google, which guarantees lease payments, effectively de-risking the investment for lenders. While this pivot offers a survival path, it raises questions about the long-term valuation model, as successful transitions might see their multiples compress from high-beta tech stocks to those of traditional utilities or REITs.

(Source：CryptoSlate)