In the wake of the recent Bitcoin halving, miners are contemplating a transition towards artificial intelligence (AI) to potentially boost their revenue streams, according to a report by CoinShares.
The halving event, which occurred recently, is expected to significantly increase costs for miners, with electricity and overall production expenses nearly doubling.
To counter these rising costs, mining companies are exploring the potential of AI operations, leveraging energy-secure locations for potential higher returns. BitDigital (BTBT), Hive (HIVE), Hut 8 (HUT), TeraWulf (WULF), and Core Scientific (CORZ) are among the companies mentioned by CoinShares that are either already generating income from AI or have plans to do so.
The report suggests a trend where Bitcoin mining operations may migrate to stranded energy sites while investment in AI expands in more stable locations.
Pre-halving, the weighted average cash cost of production was approximately $29,500 per Bitcoin. Post-halving, this is projected to rise to about $53,000. Similarly, the average electricity cost of production per Bitcoin is expected to increase from around $16,300 to approximately $34,900.
CoinShares forecasts a potential rise in hash rate to 700 exahash by 2025. However, immediately after the halving, a 10% drop in hashrate is anticipated as miners shut down unprofitable machines. Hash prices are also expected to decline post-halving to $53 per hash/day.
Despite these challenges, miners are actively managing financial liabilities and using excess cash to pay down debt, indicating strategic financial planning amidst changing market dynamics.
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