Bitcoin (BTC) Miners Diversify Into AI and HPC Sectors to Offset Market Volatility

2024 was a record-breaking year for the Bitcoin mining industry, but increased competition and sector volatility compelled several companies to adopt new strategies.

Bitcoin miners shifted their strategies in 2024 amid increased competition and sector volatility. Many opted to retain a larger portion of their mined BTC or refrain from selling altogether.

Miners may choose to hold onto their Bitcoin for several reasons. They could be anticipating further price appreciation for BTC or aiming to strengthen their balance sheets.

If they're following MicroStrategy’s playbook, a BTC treasury could also be used to hedge against currency devaluation.

As highlighted in a recent report, several miners, including MARA Holdings, Riot Platforms and Hut 8, notably purchased additional Bitcoin using borrowed funds to amplify their treasury strategies.

In addition to acquiring BTC, miners such as CleanSpark have opted to retain the majority of the Bitcoin mined in recent months.

Bitcoin miners are among the largest BTC holders, with four of the 16 largest being mining companies, according to the report.

This aligns with the growing institutional interest in Bitcoin, with several exchange-traded funds (ETFs) also accumulating BTC throughout 2024.

In fact, Bitcoin ETFs scooped up almost three times more BTC than was mined in December.

Shifting business strategyIn addition to their core mining business, some miners shifted into high-performance computing (HPC) and AI sectors in 2024 to generate predictable revenue and buffer against mining volatility, according to the report.

This trend was particularly evident in the United States, where "harsh mining economics and lucrative AI/HPC business tempted them to diversify into other compute."

Bitcoin miner Hive Digital told Cointelegraph in September that it was repurposing its Nvidia GPU for AI applications.

According to Aydin Kilic, Hive’s president and CEO, using Nvidia GPUs for AI tasks generates over $2 per hour in revenue compared to just $0.12 per hour for crypto mining.

The company’s HPC and AI platform generated more than $2 million in revenue in Q2 alone.

The NiceHash and Digital Mining Solutions report also highlighted that several BTC miners with a market cap of at least $100 million generated substantial revenue from AI and HPC initiatives.

For instance, HPC/AI revenue comprised nearly 8% of Hut 8’s revenues in the first three quarters of 2024. This figure was nearly 7% for Hive Digital.