Bitcoin Magazine
Public Bitcoin Miners are Dumping Bitcoin for AI, a Historic Mistake
There is no doubt about it, this is the age of AI. Corporations are cutting their workforces in half to invest cash flow into hardware, while the stock market remains near all-time highs, mostly thanks to FAANG. OpenClaw, a self-hosted AI agent, has more stars on GitHub than Linux and React, while even Jack Dorsey is taking harsh measures to restructure Block in the face of digital, artificial intelligence. But how much of this AI wave is hype, and how many of the companies that build its infrastructure will actually capture the profits?
Public Bitcoin miners in the United States have made their choice, a variety of them committing capital to building out AI datacenters, and some even making full rebrands, distancing themselves from the orange coin. While there’s a full range of AI-related pivots and statements made by public Bitcoin miners on the matter, a couple stand out as the most radical.
Cypher Mining, estimated to be worth around six billion dollars — placing it among the biggest in the country – announced a full rebrand away from Bitcoin and on to the AI hype train. In their most recent investment report titled “Rebrands to Cipher Digital to Reflect Strategic Shift Toward HPC,” the company explained why they “Divested 49% Stake in Alborz, Bear, and Chief Mining Sites”. Bitfarms Ltd, another large public miner valued at over a billion dollars, also made a full pivot to AI. The CEO, Ben Gagnon, went as far as saying “We are no longer a Bitcoin company,” as reported by Coindesk, though they did keep the ‘Bit’ in the name.
Some of these public companies are expecting more dollar returns from digital intelligence than those they get from Bitcoin, at least in the short to mid term, while other are others might consider it a diversification or an opportunity too large to miss.
Kent Halliburton — Co-Founder & CEO of Sazminingexplained to Bitcoin Magazine in an exclusive interview that “The average cost to mine a bitcoin right now is about $87,000. The spot price of bitcoin is about $70,000. So most of the industry is underwater, and the public miners are using that as their excuse to pivot.” Sazmining is a private Bitcoin miner that specializes in frontier energy sources, with operations mostly outside of the United States.
Halliburtonalso noted that “$87,000 is an industry average — it includes guys running old-gen rigs on grid power in Texas. At our sites in Paraguay and Ethiopia, our clients are producing bitcoin on an energy cost basis of $50,000 to $64,000, on 100% renewable energy. That’s a 10 to 30 percent discount to spot. The profitability is right there.” It just requires a longer investment horizon or cheaper energy, neither of which appears to be actionable for American public miners who have dollar-denominated quarterly reports to target.
On the topic of cheaper energy, h
